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Rent is particularly a problem for the aspiring homeowner, who needs to spend four to 10 years saving enough cash for a 20% down payment on a median-priced home in one of the 25 largest US cities, according to a recent SmartAsset study. That's assuming they're a median earner saving 20% of their annual income for the down payment.
Even those who can afford to buy a house may not be able to get much for their money in a place like New York or San Francisco, where the median home value is $1.3 million.
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From insufferable commutes to living in vehicles, here are the drastic measures Americans are taking due to a lack of affordable housing.
West Coast residents are living in cars because they can't afford housing.
In California, real estate is so expensive that families, retirees, and even tech workers are living in cars. "In the tight housing markets of West Coast cities, it's not just the destitute or the unemployed who see their cars as their best option," reported Amy Pollard for Slate.
The problem has become so severe that local governments have been trying to "tighten parking restrictions or ban vehicle residency," Pollard wrote. Such crackdowns have led to the rise of safe-parking programs run by nonprofits and some city governments, which try to accommodate vehicle residents with safety rules and regulations, she said.
Graham Pruss, a researcher and former outreach worker for Seattle's Road to Housing program, told Slate that cars are "a new form of affordable housing" in Seattle too, adding that he's met Amazon workers who live in vehicles while saving up money to buy a home one day.
People are converting vans into homes to save money.
People are also joining the #vanlife movement, which allows them to save money and travel.
One New Yorker lives in a used 2005 Dodge Sprinter that he purchased for $5,000 so he doesn't have to spend any of his $30,000 annual salary on the city's sky-high rent, reported Zachary Kussin for The New York Post.
Living in vans is also popular in California. In Mountain View California, staggering rent prices have forced some residents out of apartments or houses and into vans or RVs, reported Business Insider's Nick Bastone.
And in San Francisco, Tracey Kaplan, a reporter for the Bay Area News Group, cashed out her retirement fund to buy a cargo van for $53,894, she explained in an article for The Mercury News. She's spending an additional $37,000 on renovating it into a home.
"I spent years anxiously searching for a viable housing solution that would allow me to retire in the Bay Area without going broke," she wrote in the article.
City-dwellers are buying or renting houseboats because they're cheaper.
"The relatively low cost of buying a boat and low docking fees can help reduce monthly housing costs, and boat owners say added bonuses include stunning views and vibrant social communities," she wrote, adding that living on a houseboat evokes a certain kind of lifestyle that can feel like a vacation and bring them close to nature.
The cost of a houseboat can range anywhere from $1,500 to $15 million, a houseboat owner told Krueger, and docking costs depend on location. Misa Gidding-Chatfield and Mike Kraft previously told Business Insider they decided to live in San Francisco Bay on a 900-square-foot houseboat, which they bought for $300,000, to save money.
New Yorkers are dropping millions to live in basements so they can get more bang for their buck.
In New York City, the real estate market has gotten so bad that people are paying millions to live in the basement. According to Stefanos Chen of The New York Times, below-grade spaces offer more room for roughly one-fourth of the cost of other units in their buildings — but they still cost a pretty penny
In order to live in the city's most popular borough, Manhattan, one couple spent $1.2 million in 2015 on a 1,800-square-foot duplex studio below street level in Midtown East, Chen reported. It was the only similarly sized space within their budget below 135th street, and they still spent over a year renovating to bring more light in.
But below-grade spaces have their limitations. Bedrooms aren't permitted in them and because of plumbing rules, only half-bathrooms (read: no showers) are allowed, according to Chen.
Millennials are moving to the exurbs and commuting hours so they can afford a home.
"Rising mortgage rates and home prices, especially in urban centers, are once again motivating buyers to drive until they can afford a home, including in Dallas, Las Vegas, Atlanta, and the San Francisco Bay Area," Kusisto wrote.
Houses in the exurbs are more affordable, and some millennials find that the savings are worth the commute time, which can be up to two hours. Choosing to live in a more affordable exurb is a way for millennials to fast-track their path to homeownership.
