Tag Archives: NLIHC

The Missing Piece in The Affordable Housing Puzzle

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The National Low Income Housing Coalition has posted The Gap: A Shortage of Affordable Homes. The report opens,

One of the biggest barriers to economic stability for families in the United States struggling to make ends meet is the severe shortage of affordable rental homes. The housing crisis is most severe for extremely low income renters, whose household incomes are at or below the poverty level or 30% of their area median income (see Box 1). Facing a shortage of more than 7.2 million affordable and available rental homes, extremely low income households account for nearly 73% of the nation’s severely cost-burdened renters, who spend more than half of their income on housing.

Even with these housing challenges, three out of four low income households in need of housing assistance are denied federal help with their housing due to chronic underfunding. Over half a million people were homeless on a single night in 2017 and many more millions of families without assistance face difficult choices between spending their limited incomes on rent or taking care of other necessities like food and medical care. Despite the serious lack of affordable housing, President Trump proposes further reducing federal housing assistance for the lowest income households through budget cuts, increased rents and work requirements.

Based on the American Community Survey (ACS), this report presents data on the affordable housing supply, housing cost burdens, and the demographics of severely impacted renters. The data clearly illustrate a chronic and severe shortage of affordable homes for the lowest income renters who would be harmed even more by budget cuts  and other restrictions in federal housing programs. (2, citations omitted)

The report’s key findings include,

  • The nation’s 11.2 million extremely low income renter households account for 25.7% of all renter households and 9.5% of all households in the United States.
  • The U.S. has a shortage of more than 7.2 million rental homes affordable and available to extremely low income renter households. Only 35 affordable and available rental homes exist for every 100 extremely low income renter households.
  • Seventy-one percent of extremely low income renter households are severely cost-burdened, spending more than half of their incomes on rent and utilities. They account for 72.7% of all severely cost-burdened renter households in the United States.
  • Thirty-two percent of very low income, 8% of low income, and 2.3% of middle income renter households are severely cost-burdened.
  • Of the eight million severely cost-burdened extremely low income renter households, 84% are seniors, persons with disabilities, or are in the labor force. Many others are enrolled in school or are single adults caring for a young child or a person with a disability. (2, citations omitted)

While the report does show how wrongheaded the Trump Administration’s proposed cuts to housing subsidies are, I was surprised that it did not address at all the impact of local zoning policies on housing affordability. There is no way that we are going to address the chronic shortage in affordable housing by subsidies alone.

The federal government will need to disincentivize local governments from implementing land use policies that keep affordable housing from being built in communities that have too little housing. These rules make single family homes too expensive by requiring large lots and make it too difficult to build multifamily housing. We cannot seriously tackle the affordability problem without addressing restrictive local land use policies.

Trump, Homelessness and the General Welfare

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photo by Jay Black

The Hill published my column, Trump’s Budget Proposal Is Bad News for Housing Across the Nation. It opens,

The White House unveiled its much anticipated budget proposal today. It shows deep cuts to important agencies, including a more than $6 billion decrease in funding to the U.S Department of Housing and Urban Development (HUD). More than 75 percent of the agency’s budget goes to helping families pay their rent. Thus, these cuts would have a negative impact on thousands upon thousands of poor and working class households.

Many years ago, Congress enshrined the “goal of a decent home and a suitable living environment for every American family” within its Declaration of National Housing Policy. This goal was not just justified by the basic needs of those with inadequate housing, but also because “the general welfare and security of the nation” required it. As our nation’s leading cities grapple with rapidly growing homeless populations, this additional justification takes on added weight today.

Click here to read the rest of it.

The Gap in Affordable Homes

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photo by Kenneth Frantz

The National Low Income Housing Coalition posted a report, The Gap: A Shortage of Affordable Homes. The report opens,

For the first time since the recession, U.S. household income increased significantly during 2015. Gains were seen even among the lowest income households, with the poverty rate declining from 14.8% to 13.5%. Millions of people, however, continue to struggle economically. Household income for the poorest 10% of households remains 6% lower today than in 2006, and more than 43 million Americans remain in poverty, many of whom struggle to afford their homes.

Each year, the National Low Income Housing Coalition (NLIHC) measures the availability of rental housing affordable to extremely low income (ELI) households and other income groups. This year’s analysis is slightly different from previous years in that NLIHC adopted the federal government’s new statutory definition for ELI, which are households whose income is at or below either the poverty guideline or 30% of their area median income (AMI), whichever is higher. Based on 2015 American Community Survey (ACS) data, this report provides information on the affordable housing supply and housing cost burdens at the national, state, and metropolitan levels. This year’s analysis continues to show that ELI households face the largest shortage of affordable and available rental housing and have more severe housing cost burdens than any other group. (2, citations omitted)

The report’s key findings include:

• 11.4 million ELI renter households accounted for 26% of all U.S. renter households and nearly 10% of all households.

• The U.S. has a shortage of 7.4 million affordable and available rental homes for ELI renter households, resulting in 35 affordable and available units for every 100 ELI renter households.

• Seventy-one percent of ELI renter households are severely cost-burdened, spending more than half of their income on rent and utilities. These 8.1 million severely cost-burdened households account for 72.6% of all severely cost-burdened renter households in the U.S.

• Thirty-three percent of very low income (VLI) renter households; 8.2% of low income (LI) renter households, and 2.4% of middle income (MI) renter households are severely cost-burdened.

• ELI renter households face a shortage of affordable and available rental homes in every state. The shortage ranges from just 15 affordable and available homes for every 100 ELI renter households in Nevada to 61 in Alabama.

• The housing shortage for ELI renters ranges from 8,700 rental homes in Wyoming to 1.1 million in California. (2)

It is of course important to talk about this gap as an affordable housing issue, but as I have written before, it is as much an income problem as a housing problem. It’s not just that the rent is too damn high, but that the paycheck is just too damn low.

I don’t see anything on the political horizon that will address this fundamental set of problems, but we should at least identify it properly so we can work toward a solution when the time is right.

The Long Wait for Home

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The most recent issue of Housing Spotlight from the National Low Income Housing Coalition is titled The Long Wait for a Home. The Executive Summary reads,

The Public Housing and Housing Choice Voucher (HCV) programs provide essential affordable housing to some of the nation’s most financially vulnerable households. Forty percent of new public housing admissions and 75% of new voucher holders each year are required to be extremely low income (ELI) households, who earn no more than 30% of their area’s median income (AMI) or the federal poverty guideline, whichever is higher. Seventy-one percent of the nearly 1.1 million public housing households and 74% of the 2.2 million HCV recipient households are ELI (HUD, 2015).

The housing resources available to ELI renters however are insufficient. The private and subsidized rental markets make available only 3.2 million affordable homes for the nation’s 10.4 million ELI renter households, resulting in a national shortage of 7.2 million rental homes (NLIHC, 2016). ELI households face a long wait for housing assistance. Unable to find affordable housing, 75% of ELI renter households are severely cost burdened, spending more than 50% of their income on housing costs and leaving little money for other necessities (NLIHC, 2016).

The last nationwide survey of Public Housing Agencies (PHAs) regarding their public housing and voucher waiting lists was conducted in 2012. Since then, rental affordability has worsened, squeezing ELI renters even further out of the private market. To document the current state of waiting lists, NLIHC surveyed PHAs in the Fall of 2015 and Winter of 2016. Three hundred twenty PHAs responded with complete surveys, representing a diversity of size, location, and metropolitan status.

Survey data paint a bleak picture of waiting lists closed to new applicants and long waits for housing assistance. Key findings include: „

  • Fifty-three percent of HCV waiting lists were closed to new applicants for housing assistance. Sixty-five percent of HCV waiting lists closed to the general public had been closed for at least one year. „
  • Eleven percent of public housing waiting lists were closed to new applicants. Thirty-seven percent of public housing waiting lists closed to the general public had been closed for at least one year. „
  • The median HCV waiting list had a wait time of 1.5 years. Twenty-five percent of HCV waiting lists had a wait time of 3 years or longer. „
  • The median public housing waiting list had a wait time of 9 months. Twenty-five percent of public housing waiting lists had a wait time of 1.5 years or longer. „
  • ELI households accounted for nearly 74% of households on the average HCV waiting list and more than 67% of households on the typical public housing waiting list.
  • Families with children accounted for 60% of households on the average HCV waiting list and 46% of households on the typical public housing waiting list. „
  • Seniors comprised the most common type of household on 15% of the public housing waiting lists for which these data were provided.

Closed waiting lists and long waits for housing assistance make clear that we must expand housing resources for our nation’s lowest income renters. Legislation introduced in the 114th Congress would increase investments in vouchers, public housing, and other housing programs.

*     *      *

These policy changes, and others like them, could end housing poverty and homelessness once and for all by providing the resources necessary for every low income family to afford a home.

This report rightly brings attention to the big problems facing extremely low income households and federal affordable housing programs. Whether anything is done for them depends completely on the outcome of the election.

Friday’s Government Reports Roundup

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Friday’s Government Reports Roundup

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Housing, Out of Reach

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House_at_309_Railroad,_Las_Vegas_NM

The National Low Income Housing Coalition has released Out of Reach 2015: Low Wages & HIgh Rents Lock Renters Out. The Introduction reads,

Since its founding in 1974 by federal housing policy expert, Cushing Dolbeare, NLIHC has used data to document America’s housing affordability crisis. As part of her original analysis, Cushing observed a fundamental mismatch between the wages people earn and the price of decent housing, what we now call Out of Reach. Today, housing is still out of reach for far too many, and the gap between what people earn and the price of decent housing continues to grow.

The 2015 Housing Wage is $19.35 for a two-bedroom unit, and $15.50 for a one-bedroom unit. The Housing Wage for a two-bedroom unit is more than 2.5 times the federal minimum wage, and $4 more than the estimated average wage of $15.16 earned by renters nationwide. The Housing Wage is an estimate of the full time hourly wage that a household must earn to afford a decent apartment at HUD’s estimated Fair Market Rent (FMR), while spending no more than 30% of income on housing costs. The data in Out of Reach illustrate the gap between wages and rents across the country. In 13 states and D.C. the 2015 Housing Wage is more than $20 per hour.

Many renters earn far less than the Housing Wage in their community and struggle to find an affordable place to live. This edition of Out of Reach highlights some of the economic challenges facing low income renters, including lagging wages, inconsistent job growth, and the rising cost of living. Undoubtedly, the lack of affordable housing remains the overarching problem for low income households, a problem made worse by these economic challenges.

Expanding and preserving the supply of quality, affordable housing is essential to any strategy to end homelessness, poverty, and economic inequality. As our nation’s policymakers seek ways of overcoming these societal ills, access to affordable housing must be a cornerstone of any proposal. (1, emphasis removed)

Some of the particular findings are disturbing. For instance, “There is no state  in the U.S. where a minimum wage worker working full time can afford a one-bedroom apartment at the fair market rent.” (1) This state of affairs reflects many trends, including the fact that the minimum wage has not kept pace with inflation and is worth less today than it was a few decades ago. It is worth unpacking this finding a bit.

The report defines “affordability” as costing “no more than 30% of a household’s gross income” for rent and utilities. (2) It defines “Fair Market Rent” as “the 40th percentile of gross rents for typical, non-substandard rental units.” (2) In some ways, this report overstates the affordability crisis because minimum wage workers may be able to afford housing that falls below the 40th percentile of gross rents. Perhaps a better measure would have been to determine how many units are available to the minimum wage workers in that jurisdiction. That being said, the report does document how “rents remain out of reach for many renters.” (2) For instance, 75% of extremely low income renters spend more than 50% of their income on housing costs . . ..” (5)

Income and wealth inequality have reached extreme proportions in America today. This report highlights how this is playing out in the context of the housing market. (I would also note, however, that the report does not account for how restrictive land use policies keep the supply of new housing from growing many communities, but that may just be a subject for another report.)