Finding affordable housing isn’t getting any easier for the more than a quarter of U.S. renters that are extremely low-income. For six years, the National Low Income Housing Coalition has released an annual report calculating the discrepancy between available affordable housing units and renters who earn below the poverty line or 30 percent of the area median. Last year, they found that for every 100 households categorized as extremely low income (ELI), only 35 affordable rental homes are available—a shortage of over 7 million affordable and available homes. That same figure stands today.
Part of this shortage is caused by an influx of higher income households into more affordable homes: Almost half of the affordable rental units are occupied by families that earn above the poverty line. As incomes get higher, cumulative shortages get less pronounced. Households that earn less than 50 percent AMI have 56 affordable and available rental homes; those below 80 percent have 93.
A map of the gap (click through for an interactive version) shows that it’s a problem that persists everywhere—not one state or metro has enough affordable housing, though different shades represent varying degrees of scarcity:
Every state has fewer than 59 affordable housing units available for every 100 extremely low income families. Most have even less. (NLICH)
California, home of high-earning tech workers and ballooning rents, has 22 affordable and available units per 100 extremely low income (ELI) renter households. But the worst offender is Nevada, with only 15. Even in recovering markets, the demand for affordable housing is far greater than the supply: Maine has the relative best ratio in the country, with 59 units; Alabama, West Virginia, and Mississippi are close behind.
On the metro level, Las Vegas, Nevada’s largest city, has the most severe relative shortage, with only 10 affordable units for every low income household. The reason, says Andrew Aurand, vice-president of research at NLIHC and a co-author of the report, could be that Nevada is still struggling to recover from the housing crisis, and Las Vegas has a large base of low-income service workers slowly getting pushed out, California-style, by a boom of tech professionals. Orlando, Los Angeles, Houston, and Dallas are next up in the rankings.
“The problem is not that low-income people aren’t working hard enough,” said Diane Yentel, the president and CEO of NLIHC. “The problem, rather, is that many jobs don’t pay enough for low-income people to afford to pay the rent.” The average full-time, 40-hour-a-week worker making minimum wage would need to earn more than $17 an hour to afford a modest one- or two-bedroom apartment by today’s standards. NLIHC estimates that someone making the federal minimum wage of $7.25 (higher in many cities, but not by much) would have to work multiple jobs—and a sanity-draining average of 94.5 hours per week—to make enough to afford even a one-bedroom.
That’s why so many low-income American renters are considered cost-burdened—9.7 million ELI renters spend more than 30 percent of their income on rent; of those, 8 million are considered severely cost burdened, forced to spend more than half.
Those burdens often manifest physically. When families are forced to make budget trade-offs, they spend less on food and transportation; and way less on healthcare for seniors and kids. That’s not to mention the psychological toll that housing instability itself takes—and the harmful cycle of eviction that starts with a few unpaid bills and can spiral into extended periods of homelessness.
Vulnerable populations such as seniors, disabled people, and families with children are overrepresented among extremely low-income renters. Only a quarter of all ELI households are “non-disabled non-seniors with no children,” the report states. Because income disparities tend to be drawn across racial lines, African-American and Hispanic residents also make up much of the ELI population: 35 percent of ELI renters are black, and 29 percent are Hispanic.
Three quarters of extremely low income renter households are home to disabled residents, senior residents, and/or families with children. (NLIHC)
Based on these stats, the problem hasn’t gotten any less pronounced since last year—and for most people, it’s worse. The Great Recession and housing crisis of 2007 and 2008 catalyzed a three-part renter’s nightmare. First, millions of former homeowners were foreclosed upon and re-entered the housing market. In the years that followed, Millennials—saddled by student debt—have remained renters and delayed homeownership. And as Baby Boomers age out of larger homes, they too enter or re-enter the rental market. Demand is growing, and supply struggles to keep up. A decade ago, 40 affordable and available rental homes matched every 100 ELI renter households, and 67 for those who earned at or below 50 percent of AMI. Today, it’s 35.
The NLIHC argues that the tools the federal government has to help low-income households just aren’t being used. And by reducing the corporate tax rate in its newest version of the tax bill, the White House may have stripped the Low Income Housing Tax Credit of its teeth. Between fiscal-year 2010 and 2017, HUD funding decreased 9.3 percent, and President Trump, along with Housing Secretary Ben Carson, are promising more aggressive cuts to programs like the public housing operating fund, Community Development Block Grants, HOME Investment Partnerships, and the Self-Help Homeownership program in 2019. That means that the gulf will widen: The NLIHC estimates that 200,000 more families could lose federal rental assistance in the coming years.
In the absence of federal help, state and local governments can attempt to address funding or access holes themselves. “One of the[ir] main roles is eliminating regulatory barriers that either make it impossible to build multi-family housing in some communities and/or that drive up the costs to building affordable housing, and lengthen the period it takes to build affordable homes,” said Yentel.
But it’s going to take a long time and a sustained effort to fill a 7-million-home hole—the kind that would require a major federal investment in affordable housing construction through the National Housing Trust Fund and rental assistance programs like Section 8 vouchers. And that’s the kind of help that renters are unlikely to see this year.