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Report: Rental Housing Affordability Crisis Worst for Lowest-Income Families

February 10, 2020: We have updated the number of renter households paying more than 30 percent of their income for housing.

Despite a strong economy, the number of renter households paying too much for housing — more than 30 percent of their income, the federal government’s threshold for unaffordability — rose to nearly 21 million in 2018, a new study from the Harvard Joint Center for Housing Studies finds.

Renters with the lowest incomes are the likeliest to be stretched the thinnest, often making tradeoffs between buying food and health care or forgoing heat or air conditioning to cover their rent, the report finds. As a growing number of people experience high housing cost burdens, housing instability, and homelessness, the researchers conclude that, “only the federal government has the scope and resources to provide housing assistance at a scale appropriate to need across the country.”

Renters in every state and in metropolitan and rural areas alike are paying very high shares of their income for housing, and, as this affordability crisis deepens, it’s affecting more moderate-income households. But as the chart below shows, the lowest-income households are far likelier to pay a disproportionate share of their monthly budgets on rent and utilities than those at modestly higher income levels.

Eighty-five percent of renter households with incomes of less than $15,000 a year paid over 30 percent of their income for housing, compared to a third of those with annual incomes between $45,000 and $75,000 and just 7 percent of those with incomes above $75,000.

Renters with the lowest incomes were also more likely to face extreme housing cost burdens. The great majority — 75 percent — of renter households earning less than $15,000 annually paid over half their income for housing.

Many low-income renters work in jobs that don’t pay enough to cover rising housing costs. For example, half of renters employed in health care support jobs pay more than 30 percent of their income for housing, the report finds. Positions like home health aide or personal care aide are projected to be among the fastest growing jobs over the next decade, but the salaries are often too low for families to make ends meet. As a result, these households often have little money left to cover other basic needs, putting them one financial emergency away from eviction or homelessness. The report shows that when housing costs too much, households — particularly seniors and families with children — spend less on food and health care.

A strong economy and employment are no guarantee that families, particularly those with the lowest incomes, can afford their rent. With housing costs outpacing renters’ incomes, combined with a shrinking pool of affordable rental units, it’s no surprise that the Joint Center for Housing Studies finds that more people are struggling with high housing costs and housing instability.

Federal rental assistance is highly effective at helping the lowest-income people afford decent, stable housing, but only 1 in 4 eligible households receives assistance due to funding limitations. Given the depth and breadth of the housing affordability crisis, policymakers should significantly expand federal rental assistance.