Housing Affordability Problems Worsening for Poor Renters

Housing has become increasingly unaffordable for low-income renters since the start of the recession, according to fresh data from several sources:

• In 2009, 5.6 million households with incomes below the poverty line — or about 60 percent of all poor renter households — paid at least half of their income for rent and basic utilities, according to newly released data from the Census Bureau’s American Housing Survey. That’s a 17 percent (800,000 household) rise since the last survey in 2007 and a whopping 45 percent (1.7 million household) rise since 2003.For a typical family, housing costs consume only about a quarter of household income. The federal government considers housing unaffordable if it costs more than 30 percent of a household’s income.
• In 2009, roughly 325,000 children lived at least part of the year in a homeless shelter, according to Department of Housing and Urban Development data, an increase of 12 percent since 2007. Two to three times as many children were homeless if you count those living temporarily in hotels or motels, doubled-up with other families, or on the street as well as those in shelters, separate data from the Department of Education suggest.

What explains these alarming trends? Part of the story is that many poorer households’ incomes have fallen during the recession due to job losses, which has widened the gap between incomes and housing costs.

Yet recent changes in the housing market have done little to ease burdens on renters. While home prices have fallen by nearly 30 percent since the market peaked in 2006, residential rents have merely leveled off over the past year and are actually 11 percent higher now than in 2006, as the first chart shows.

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While federal rental assistance programs have played an essential role in helping low-income families to find affordable housing, they have failed to keep pace with the rapidly growing need due to funding limitations, as the second chart shows. Indeed, as the number of poor renter families that pay more than half of their income for housing increased by 1.7 million from 2003 to 2009, the number of families receiving rental assistance actually declined slightly.

Last year’s Recovery Act provided $1.5 billion in emergency funds to help families who are homeless or at risk of becoming homeless to find or retain stable housing. Local housing agencies have begun to use these funds to mitigate the effects of the recession on homelessness.

Still, more help is clearly needed.