HousingSpotlight2-1

8/3/2019 HousingSpotlight2-1

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The Shrinking Supply of Affordable HousingOne way to measure the afordable housing problem in the U.S. is to compare the number o renter households with incomes u

specied level with the number o rental housing units that are afordable and available1 to them. Tis approach is called afordhousing gap analysis.

At a time when more people in the U.S. are poor than have been in decades and when unemployment remains high, it should comno surprise that the afordable housing gap is growing. More people with less income are looking or homes to rent at the same hat rents are rising. Te obvious outcome o this mismatch between supply and demand is that some people do not have homll they become homeless. Te existence o the gap is not a matter o debate.

n this issue oHousing Spotlight, NLIHC uses new data rom the 2010 American Community Survey (ACS) Public Use Microample (PUMS) to examine the disparity, between the current supply o homes or rent and the number o low income househ

who need rental homes they can aford.2 NLIHC also reexamines 2009 data using a revised methodology in order to make compari

etween 2009 and 2010.

An afordable unit is one in which a household at the dened income threshold can rent without paying more than 30% o its income on housing and utility costs. A unit is afordable vailable i that unit is both afordable and vacant, or is currently occupied by a household at the dened income threshold or below.

NLIHC also conducts a gap analysis using data rom the biannual American Housing Survey done by the U.S. Census Bureau and HUD. Although the datasets produce somewhat difumbers, the nding that there is a large and growing gap between the number o extremely low income renter households and rental housing they can aford is consistent.

LOWEST INCOME RENTERSFACE INADEQUATE SUPPLY OFAFFORDABLE HOUSING UNITS

n 2010, there were approximately 40 million renter householdsn the United States. One in our, 9.8 million, had incomes thatan be classied as extremely low (ELI) using HUD categories.See Box 1 or denition o extremely low income and other

HUD income categories). Tis is an increase o almost 200,000

ELI households between 2009 and 2010. However, the supply rental units afordable to ELI households, which was already

woeully inadequate to meet this need, decreased rom 2009 to010 by over 200,000 units.

n 2010, there were 5.5 million rental units afordable to these.8 million ELI renters, producing an absolute decit o 4.3

million afordable units. Tis is an increase in the shortage 400,000 such units, which stood at 3.9 million in 2009.

Another way o describing the gap is that or every 100 ELIenters in 2010, there were only 56 units they could potentiallyive in without spending more than 30% o their income on

housing and utility costs (Chart 1). Te comparable number in009 was 59.

ELI renter households are not the only ones acing a shortage afordable units. Tose below the very low income (VLI)hreshold also experienced a shortage, with only 87 afordable

units or every 100 VLI renter households in 2010. Teirituation grew even more dire since 2009, when there were 94fordable units per 100 VLI renter households.

HOUSINGSPOTLIGHTVolume 2, Issue 1 | February 201National Low Income Housing Coalition

It is important to note that a surplus o afordable unitsound or households in the low income (LI) category in 2Tere were 134 units or every 100 renter households. In 2there were 137 units or every 100 LI renter households.

Chart 1: Afordable, and Afordable and AvailUnits or Every 100 Renter Household a

Below Income Treshold (MMFI 20

140

120

100

80

60

40

20

0ELI VLI

Afordable Units Afordable and Available

Source: NLIHC abulations o 2010 ACS PUMS

56

30

87

58

134

98

LI


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AFFORDABLE DOES NOT MEAN AVAILABLE

Te gap analysis cannot stop at computing just the shortage o units that are afordable to ELI and VLI renters, because no the units that are afordable are available or appropriate or them to rent. First o all, many o those units are occupie

higher income renters, and thus are not available or rent by those most in need. Other reasons these afordable units maye available are that some may be in poor condition, and others might be too ar rom jobs and public transportation. Finally,ange o afordable rents varies considerably within each income category, so that a unit afordable to someone with incom9% o the area median, or example, is not likely to be afordable or someone with income at 15% o the area median.

With these data it is possible to take into account the act that higher income renters are occupying the most afordable unWhen the analysis accounts or which households in which income groups actually live in these units, the shortage o unitELI renter households is much greater. Te true decit o rental units that were afordable and available or ELI household

010 was actually 6.8 million, much higher than the afordable-only decit o 4.3 million. Tus, there were only 3 million u

hat were both afordable and available to the 9.8 million ELI renter households in the U.S. in 2010 (Chart 2). Tis equals jusfordable and available units per 100 ELI renter households. In 2009, the shortage o units afordable and available to ELI rehouseholds was 6.4 million and there were 33 afordable and available units per 100 ELI renter households.

Yet again, it is not just ELI households who ace this problem. Tough the situation improves somewhat when the income thress increased, households at the VLI level still ace a shortage, with just 58 afordable and available units per 100 renter househt the VLI threshold or below. Tere were 62 afordable and available units per 100 VLI renter households in 2009. Finally, wn 2009, there was a slight surplus o afordable and available units or renter households at or below the LI threshold (101 unhere was a slight decit in 2010, with 98 afordable and available units per 100 LI renters.

Chart 2: Renters and Afordable Units, by Occupancy Status, At or Below the ELI Treshold (MMFI 2010)

FOR EVERY 100 ELI RENTER HOUSEHOLDS,THERE ARE ONLY 30AFFORDABLE AND AVAILABLE UNITS

ELI Households VacantOccupied by Higher Income Households

ELI Households ELI AfordableUnits

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Gap including Afordable butUnavailable Units: 6.8 MILLION UNI

Absolute Decit:

4.3 MILLION UNIS


2 | HOUSING SPOTLIGHT: The Shrinking Supply of Affordable Housing


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ELI RENTERS HURTING IN EVERYSTATE

Examination o the gap numbers by state reveals considervariability in the afordable rental housing shortage. 1 shows the number o afordable units per 100 rehouseholds at various income thresholds, the numbeafordable and available units per 100 renter householdthe same income thresholds and the percent o renters in income category who experience severe housing cost burdby state. Te absolute shortage o afordable units is greatethe Western states o Nevada, Caliornia, Arizona and Orewhile Alaska, North Dakota, Montana, and Wyoming, som

the least populous states, appear to have a su cient suppafordable units or their ELI households.

However, as able 1 and Map 1 show, there is not a sistate with enough units that are both afordable and avaito house all ELI renters. Te map illustrates that the lacafordable and available units is most severe in the wesstates as well as in exas and Florida. Wyoming, with jusafordable and available units per 100 ELI renter househhas the most units afordable and available to its pooresidents, but has a signicant decit nonetheless.

AFFORDABLE RENTAL SHORTAGECREATES HEAVY BURDEN FOR ELIRENTERS

What are the consequences o this severe decit o housingunits that are both afordable and available to the lowest incomeenters? Some amilies must live in substandard housing, athe mercy o landlords who know their tenants have no otherhoice. Many must live long distances rom their jobs, reducing

amily time. Others double up with other households, otenesulting in crowded and stressul conditions.

But the most common result is that the vast majority o ELIhouseholds must spend excessive portions o their limitedncome on rent and utility costs. Some owner and renter

households at all income levels ace some level o housing costurden, but it is ELI renters who experience the most severeost burdens. I the standard or housing afordability is 30%r less o household income, anyone who pays more than that

s said to have a housing cost burden. Paying more than hal ones income or housing and utility costs is considered aevere housing cost burden.

n 2010, hal (50%) o all renters had some level o housing costurden and o those, 27% had a severe housing cost burden,ompared to 29% o all homeowners living with a housing costurden, and just 12% o those owners acing a severe housingost burden. O those renters paying more than hal o theirncome on housing costs, 68.1% o them were ELI, 23.8%

were VLI, 6.6% were LI, and just 1.4% earned 80% or more oAMI (Chart 3). Tree-quarters (76%) o ELI renter householdspent the majority o their income on rent and utilities,eaving them with little money let or other necessities suchs ood, medicine, transportation, and childcare. Tese are the

households who are most vulnerable to become homeless i

heir income goes down or they have unexpected expenses.

As might be expected, based on the loss o afordable andvailable rental units since 2009, more amilies were living

with severe cost burden in 2010 than in 2009. Te percentage renter households paying more than hal o their incomen rent and utilities increased across all income groups, with

ELI and VLI renters most afected. Seventy-six percent oELI renters and 36% o VLI renters had a severe housing cost

urden in 2010, compared with 74% and 34% respectively in009.

0% 10% 20% 30% 40% 50% 60% 70%

0.2%

1.2%

6.6%

23.8%

68.

Not Low Income

Moderate Income

LI

VLI

ELI

Chart 3: Percentage o Severely Cost Burdened Renters, by Income Category, 2010

ource: NLIHC abulations o 2010 ACS PUMS Data

AFTER PAYING RENT AN

UTILITIES,3/4 OF ERENTER HOUSEHOLD

HAVE LESS THAN 50%OF THEIR INCOME LEF

FOR FOOD, MEDICIN

TRANSPORTATIO

CHILDCARE, AND OTHE

ESSENTIAL COST

NATIONAL LOW INCOME HOUSING COALITIO


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BOX 1: DEFINITIONS

Extremely Low Income (ELI)Very Low Income (VLI)Low Income (LI)Moderate IncomeNot Low Income

Metropolitan Area Median Family Income (MMFI)Te median amily income in a metropolitan area

WHAT CAN BE DONE?

Te data presented in this paper show the bleak circumstances o households who are struggling to make ends meet ithese di cult times. Te solution is not complicated. Te supply o rental homes that the lowest income people can aformust be increased. A program is already in place that would provide or the production, rehabilitation and preservation orental homes, 75% o which must be afordable to ELI households, with the rest serving VLI households. Tis program is thNational Housing rust Fund, which was established in 2008 but has yet to be unded. Every year the NHF goes unundeis another year o worsening conditions or ELI and VLI renters. I the NHF is unded in 2012, states and localities cabegin to close the gap between the supply and demand or truly afordable housing.

Map 1: Afordable and Available Units per 100 ELI Renter Households, 2010

| HOUSING SPOTLIGHT: The Shrinking Supply of Affordable Housing

46 - 55 Units 37 - 45 Units 27 - 36 Units 17 - 26 Units

INCOME HRESHOLD(or gap analysis)

Less than or equal to 30% MMFILess than or equal to 50% MMFILess than or equal to 80% MMFILess than or equal to 120% MMFIGreater than 120% MMFI

INCOME CAEGORY(or cost burden analysis)

0-30% o MMFI31-50% o MMFI51-80% o MMFI81-120% o MMFIGreater than 120% o MMFI


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able 1: State Comparisons Source: NLIHC abulations o 2010 ACS PUMS

NATIONAL LOW INCOME HOUSING COALITIO

tates in red have less than the national level o afordable and available units per 100 households at or below the ELI thresh


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ABOUT THE AMERICANCOMMUNITY SURVEY PUMS DATA

Te American Community Survey (ACS) is a nationwide survey approximately three million households, conducted annually.t provides timely data on the social, economic, demographic and

housing characteristics o the U.S. population. Te ACS replacedhe Census long orm in 2010 and eliminated the long waitingeriod or new data between each decennial census.

Each year the Census Bureau makes Public Use Microdata SamplePUMS) les available to the public to allow or deeper analysis the ACS. Te PUMS les contain records on a subsample o

housing units and contain inormation rom the completedACS questionnaire. Tis enables users to aggregate and tabulatehe data in whatever way is relevant to their research. In ordero determine the Metropolitan Area Median Family Income,

NLIHC used the Missouri Data Centers MABLE/Geocorr2Knline application (Version 1.3.3) to determine the geographicelationship between Core Based Statistical Areas and Public Use

Microdata Sample Areas (PUMAs) and applied the median amilyncome or a CBSA to the corresponding PUMA i at least 50% ohe PUMA was in the CBSA. Otherwise, the PUMA was assignedhe statewide nonmetropolitan median amily income or thetate the PUMA is in. NLIHC used this methodology on both the009 and 2010 ACS PUMS les in order to make the comparisons

n this paper. However, this analysis should not be comparedo previous analyses by NLIHC on the shortage o afordable

housing units. As with any analysis based on a survey, all guresn this report are estimates and have associated margins o error.

FOR MORE INFORMATION

you are interested in looking more closely at the numbers rom

our state, have questions on the methodology used, or have anyther comments or questions on this edition o NLIHCs Housingpotlight, please contact NLIHCs Senior Research Analyst,

Megan Bolton.

More inormation about the ACS PUMS les can be ound on theU.S. Census Bureaus webpage at http://1.usa.gov/d7Rn8c.

Megan Boltonenior Research Analyst, NLIHC

[email protected] x245

NLIHC Members,Our Research Team isHere to Help!

Housing Spotlight is among the valuable reporproduced by NLIHC. An increased supply housing data in the past ew years means can be di cult to know what data to use anwhen. One o the benets o being an NLIHmember is that our Research eam is here help you understand the data and identiy thstatistics you really need to become a moefective advocate. Tis assistance is provideat no additional charge.

o take advantage o this great membersh

benet, email Megan Bolton, Senior ResearAnalyst, at [email protected].

Join NLIHC and become eligibfor research assistance and othebenefits atwww.nlihc.org/join

Te National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people

he lowest incomes in the United States have afordable and decent homes.

727 15th Street NW, 6th Floor | Washington, D.C. 20202.662.1530 | www.nlihc

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HousingSpotlight2-1