High-Income Households Over $100,000 Now Rent Burdened in Denver, Seattle and Dallas

Written by:

Rudi Davis

Date:

25 Feb 2026

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Housing affordability challenges now extend beyond low-income households and affect households earning over $100,000 in cities such as Denver, Seattle, and Dallas. According to Marc Norman, Associate Dean at NYU School of Professional Studies Schack Institute of Real Estate, these households are increasingly rent burdened and eligible for affordable housing programs. He describes this as a shift from the late 1990s and early 2000s, when affordability pressures were concentrated among lower-income populations.

Norman notes that the definition of “housing crisis” has changed. Where once it was an issue for those at the lowest rungs of the income ladder, it now affects what were once considered middle-income families. “The crisis was really one of people at the lower income spectrum, and now we’re seeing the housing crisis pretty much everywhere, including what we used to call middle-income,” he says.

The expansion reflects a persistent mismatch between income growth and rising housing costs. Over the past 20 to 30 years, construction and land costs have risen sharply, whereas wages for middle- and lower-income workers have increased only modestly. As a result, a larger share of households cannot afford housing at current prices.

Construction Costs and Required Household Income

Norman estimates that the average construction cost of a housing unit in the United States is approximately $350,000. To afford a unit at that cost, a household must earn $85,000 to $100,000 per year. This calculation highlights the core issue. The cost of building new housing has outpaced wage growth. As a result, many middle-income families cannot afford newly constructed homes.

“If you equate that to what somebody’s making, somebody has to make $85,000 to $100,000 just to afford what it costs to build a typical unit,” Norman explains.

The gap is wider for lower income workers because wages have stagnated. Norman points out that if incomes had merely kept pace with inflation, the affordability crisis would not be as severe. Instead, the gap between household income and housing costs continues to widen, making it increasingly difficult for families to keep up each year.

The problem is compounded by rapidly rising land costs, which can account for 30%-40% of total development costs in some cities. As land prices rise, the income required to afford new housing increases as well, pushing newly constructed homes out of reach for most middle-income families. This forces many to compete for a shrinking pool of older, less expensive housing or to move farther from job centers.

How Wage Stagnation Contributes to Housing Affordability

Norman traces the affordability crisis back to wage stagnation that began in the 1970s and 1980s. At that time, inflation rates for materials, labor, and wages moved in tandem, and most workers’ earnings kept up with housing costs. But over the past 20 to 30 years, incomes for middle- and lower-income workers have barely increased, while housing costs have continued to rise.

“In the 70s and 80s, inflation for materials and labor moved together with incomes. But over the last 20 or 30 years, incomes have been pretty flat, especially for the middle and lower end, while housing costs, construction costs, insurance, and other expenses have increased exponentially,” Norman says.

Wage stagnation shows that affordability is not determined solely by supply or construction costs. Household income also plays a central role. Even if more homes are built or construction costs decline, many families will still be unable to afford housing unless incomes rise.

Norman emphasizes that income growth is an often-overlooked policy tool. Most housing policy focuses on increasing supply or reducing construction costs. However, these steps alone cannot address affordability for the households most in need. Without addressing wage stagnation, even rapid housing production will not make housing accessible to lower-income families.

“Families making over $100,000 are now eligible for affordable housing and are rent-burdened. That expansion up the income ladder is a major change over the last 30 years,” Norman says.

The Impact of Land Costs on Development

Land costs are another major factor in the affordability equation. In some cities, they account for 30% to 40% of total development costs, according to Norman. As land becomes more expensive, the gap between what families can afford and the cost of building new housing widens.

“Land costs have increased steadily. In some cities, land can be 30% or 40% of the total development cost,” Norman notes.

Norman highlights New York’s effort to map publicly owned land as a means of reducing costs. By identifying land owned by city agencies that can be used for new housing, the city can cut land costs by 30% or more. This enables developers to build more affordable units without direct subsidies, thereby extending affordability to a larger share of middle-income households.

“If you can take 30% off the cost by using publicly available land, you’ve already made a big difference in the affordability equation,” Norman says.

Land costs have a greater impact in high demand cities where land is scarce and expensive. In these markets, even a modest reduction in land costs can significantly improve affordability. Norman argues that other cities should follow New York’s lead by identifying and using public land for housing development.

Income Growth and Housing Policy

Norman argues that housing policy must address income growth alongside supply and construction costs. The current crisis is not only about how many homes are built or how much they cost to construct, but also about whether families earn enough to afford them. Without higher wages, housing will remain out of reach for many, even if supply increases.

However, Norman acknowledges that income growth is largely outside the direct control of housing policymakers. Wages are shaped by broader labor market conditions, economic growth, and employer practices, not by zoning or building codes. Still, he believes policymakers should consider income growth as part of a comprehensive approach to affordability.

One strategy is to link housing policy with economic development. Cities that attract high-wage employers and invest in workforce development create opportunities for residents to earn more and afford better housing. These policies do not directly increase housing supply, but they make it easier for households to cover the cost of living.

Norman also advocates policies that reduce costs for low-income families, not just policies that increase supply. Reducing land costs, easing regulatory barriers, and allowing for more flexible housing types can all make housing more affordable. Still, he contends that these steps must be paired with efforts to raise incomes for the lowest earners.

Policy Implications and Outlook

The current housing affordability challenge reflects broader economic trends, particularly stagnant wages and rising costs. Norman’s analysis suggests that meaningful progress on affordability will require a combination of more housing, lower costs, and higher incomes. Policymakers who focus only on supply or construction costs will miss the underlying income-cost mismatch that is driving the crisis.

The fact that families earning over $100,000 are now rent-burdened and eligible for affordable housing programs in major cities underscores the scale of the problem. What was once a challenge for the lowest income households now affects a broader segment of the population. Solutions will need to address not only how housing is built and where it is located, but also whether families earn enough to afford housing.

Policy Implications and Outlook

Looking ahead, the expansion of the affordability crisis into higher-income brackets indicates that housing policy must adapt to new realities. Cities that want to remain livable for families across the income spectrum will need to pursue coordinated strategies: using public land, supporting wage growth through economic development, and ensuring that new supply is genuinely affordable. Without these measures, the gap between housing costs and household income may continue to widen for middle and lower income Americans.