When a family spends more than half of its income on a home, their children’s reading and math abilities tend to suffer, according to a new study by Johns Hopkins University. This is also the case when they spend too little — less than 20 percent of their income.
In fact, children’s academic skills seem to thrive best when families spend about one third of their income on housing.
For the study, researchers investigated the effects of affordable housing on the cognitive development, physical health, and emotional well-being of children living in poverty. Housing costs seemed to have no effect on a child’s physical or social health — only their cognitive skills.
“Families spending about 30 percent of their income on housing had children with the best cognitive outcomes,” said Sandra J. Newman, Ph.D., Johns Hopkins professor of policy studies and director of the university’s Center on Housing, Neighborhoods and Communities.
“It’s worse when you pay too little and worse when you pay too much.”
The researchers pulled data from the Panel Study of Income Dynamics and its Child Development Supplements as well as the 2004–2009 Consumer Expenditure Surveys. They focused on families with incomes at or below 200 percent of the federal poverty level.
More than 88 percent of renters with the lowest incomes spent more than 30 percent of their income on rent, according to the 2009 American Community Survey. Families that use most of their income for shelter spend less money on books, computers, and educational outings needed for healthy child development, according to Newman and her co-researcher C. Scott Holupka, Ph.D.
On the other hand, families that don’t invest enough in housing typically end up in distressed neighborhoods and inadequate dwellings — factors that also take a toll on children.
“The markedly poorer performance of children in families with extremely low housing cost burdens undercuts the housing policy assumption that a lower housing cost burden is always best,” said Newman. “Rather than finding a bargain in a good neighborhood, they’re living in low-quality housing with spillover effects on their children’s development.”
The researchers found that families that had obtained truly affordable housing — spending roughly 30 percent of their income — did indeed spend more money on enrichment for their children.
The findings showed that when families lowered their spending on housing from over half of their income to the ideal of 30 percent, they spent an average of $98 more on their children. Those who increased the amount spent on housing — from 10 percent of their income to 30 percent — spent about $170 more on child enrichment.
“People are making trade-offs,” Holupka says, “and those trade-offs have implications for their children.”
The findings are published in two journals: Journal of Housing Economics and Housing Policy Debate.
Source: Johns Hopkins