America’s Housing Crunch Is So Bad It May Hurt City Bond Ratings

Not only is the shortage of affordable housing and the number of homeless on America’s streets a social and public policy crisis, it’s increasingly becoming a risk for municipal-bond buyers as residents of high-cost cities struggle to make ends meet.

Home prices are up 33% nationwide over the past five years and the homeless population increased in Los Angeles, New York City and the Seattle metro area between 2014 and 2018, according to a report from Moody’s Investors Service. Failure to deal with these changes puts local governments’s bond ratings at risk as residents move to cheaper jurisdictions, spend less and use more social services.