Press Release
In Search of Shelter:
The Growing Shortage of Affordable Rental Housing
STUDY FINDS AFFORDABLE HOUSING SHORTAGE AT
ALL-TIME HIGH
Three of Every Five Poor Renters Spend More than Half of
Income on Housing
The shortage of low-rent housing in the United States reached a record high in 1995 when the number of low-income renter households exceeded the number of low-cost rental units by 4.4 million, according to a study released by the Center on Budget and Policy Priorities.
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With nearly two low-income renters for every low-cost unit, most poor renters paid large proportions of their incomes for housing, the study found. Based on Census data for 1995, the most recent data available, the study reported that three of every five poor renters paid more than half of their incomes for rent and utilities. The typical poor renter family paid 60 percent of income for these costs.
To be considered affordable under federal standards, housing should consume no more than 30 percent of a low-income family's income. The study found 82 percent of poor renter families paying more than 30 percent of income for rent and utilities in 1995.
The shortage of affordable housing grew substantially even in the 1990s, according to the study, despite strong economic growth. Between 1991 — when the recession of the early 1990s reached bottom — and 1995, the gap rose by one million, with the number of low-cost units declining another 100,000 and the number of low-income renters rising 900,000.
The study found that two of every three poor renters receive no housing assistance. Roughly two million low-income households remain on waiting lists for such assistance. The report also noted that legislation before Congress could make it more difficult for poor families to gain access to the limited supply of subsidized housing.
Housing Shortage Affects All Regions
The severe shortage of low-income rental housing affects every region of the country, with the greatest shortage in the West, where there were nearly three low-income renters for each low-cost unit. The study also found large housing shortages in nearly all of the nation's 45 largest metropolitan areas as well as in rural areas. The Center's study, In Search of Shelter: The Growing Shortage of Affordable Rental Housing, includes data on all 45 large metro areas for which the Census Bureau collects housing data.
Many of the poor families facing affordability problems are working families, the analysis found. Over half of all poor renter families with children have one or more working adults. Some 78 percent of working poor renters spent more than 30 percent of income on housing in 1995.
"The number of low-income families unable to find apartments they can rent without paying the lion's share of their income has continued mounting despite economic growth," said Jennifer Daskal, the study's author. "These families, many of them working poor families with children, have little money left for other necessities."
Widening Gap Reflects Economic, Policy Trends
The report noted that in 1970, the number of low-cost rental units exceeded the number of low-income renters by 300,000. By 1995, there were only 6.1 million low-rent units for the nation's 10.5 million low-income renter households, a shortage of 4.4 million units. This shift occurred because the number of low-income renter families climbed sharply over this 25-year period while the number of low-rent units in the private market declined. (The study defines low-income renter households as those with incomes below $12,000 a year, as measured in 1995 dollars, about equal to the poverty line for a family of three. Low-rent units are defined as those costing no more than $300 a month in 1995 dollars; units at that cost level would consume 30 percent of the income of a family with a $12,000 income.)
The report found that expansions in federal housing assistance since the 1970s have helped to address the loss of affordable private housing and kept the affordable housing gap from growing still wider. Subsidized housing now accounts for half of all low-cost rental units in the country, the study said, up from one-fourth in 1975.
Nevertheless, policy changes in recent years have nearly halted the extension of housing assistance to more low-income households. The number of new housing subsidies the federal government funded in 1997 was one-seventh the number of new subsidies funded 20 years earlier, in 1977. If the new commitments had not been reduced so sharply, the study noted, the affordable housing shortage would be less acute today.
The study found that renters at higher income levels do not encounter housing affordability problems of comparable severity. Some 59 percent of poor renters paid at least half of their income for housing in 1995, compared with 20 percent of renters with incomes between 100 percent and 200 percent of poverty and just two percent of renters with incomes exceeding twice the poverty line.
The study found improvement in one area — the proportion of poor renters living in physically deficient housing fell from 22 percent in 1985 to 14 percent in 1995. The proportions of poor renters living in overcrowded housing or housing in which families are doubled up, however, stayed the same or increased. The study also found that 55 percent of all poor renters living in physically deficient, overcrowded, or "doubled-up" housing spent at least half of their income for such housing.
Congressional Action Could Exacerbate or Ease Affordable Housing Shortage
Several proposals before Congress could affect the magnitude of the affordable housing shortage in coming years, the study said. Today, housing assistance becomes available primarily through turnover, as some families leave the program. Legislation both the House and Senate have passed would allow housing authorities to allocate a large share of available units to families with incomes well above the poverty line. This would aggravate the shortage of affordable housing among poor renters, the study said, including the working poor.
The study sounded a warning particularly about the provisions that would shift a portion of federal housing vouchers from poor families to those who have higher incomes and less need for government rent subsidies. Some poor families living in blighted areas now can use vouchers to move to areas with better job opportunities, enabling them to seek employment that may lift them out of poverty, the study said. Housing vouchers also can help working poor families struggling to raise their children on low wages to make ends meet.
"The congressional bills would force working poor families and parents moving from welfare to work to sit even longer on waiting lists for housing assistance, while shortening the wait for less needy families. That would be unwise policy, " the Center's director, Robert Greenstein, commented.
The study also reported that in recent years, Congress has reversed a longstanding policy of gradually increasing the number of low-income households provided rent subsidies each year, a policy designed to help offset the ongoing decline in the number of low-cost rental units in the private housing market. The discontinuation of this policy has contributed to the worsening of the low-income housing shortage, the study found. It also noted that a pending Administration proposal to provide 50,000 new rental vouchers for use in state and local programs that would seek to move families from welfare to work and support working poor families could modestly ease the growing rental housing shortages among low-income families, while also promoting welfare reform efforts.
State and Local Housing Groups
Contact these groups for comment and information about local press activity
| CALIFORNIA
Mike Harold Christine Minnehan LOS ANGELES Jan Breidenbach Elena Popp OAKLAND Debbie Raucher SACRAMENTO Stacy Clary SAN DIEGO Greg Akili SAN FRANCISCO Dianne Spaulding SAN JOSE Peg Miller CONNECTICUT/HARTFORD Jeff Freiser FLORIDA/TAMPA Marty Lawyer Jaimie Ross GEORGIA Shawn Lucas |
ILLINOIS/CHICAGO
Judy Meina INDIANA/INDIANAPOLIS Mark St. John MARYLAND/BALTIMORE Becky Sherbloom MASSACHUSETTS/BOSTON Aaron Gornstein MINNESOTA/MINN-ST. PAUL Chip Halbach MISSOURI/ ST. LOUIS Laura Barrett Janet Becker NEW JERSEY/NORTHERN NEW JERSEY Arnold Cohen NEW YORK Joe Heaphy Cecilia Tkaczyk ROCHESTER Greater Upstate Law Project NORTH CAROLINA/CHARLOTTE Rebecca Martinez |
OHIO/CLEVELAND
& CINCINNATI Bill Faith OKLAHOMA/OKLAHOMA CITY Steven Dow OREGON Janet Byrd PENNSYLVANIA/PHILADELPHIA Andy Frishkoff PITTSBURGH Craig Stevens RHODE ISLAND/PROVIDENCE Judy Jones Carol Brotman TEXAS/DALLAS & FT. WORTH John Henneberger UTAH/SALT LAKE CITY Debbie Ashman WASHINGTON STATE Margaret Maxwell Laura Stravino WASHINGTON, DC Olive Idehen Akhigbe |
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