The voice of Urban Institute's researchers and staff
March 3, 2014

We’ve mapped America’s rental housing crisis

Many Americans struggle to afford a decent, safe place to live in today’s market. Over the past five years, rents have risen while the number of renters who need moderately priced housing has increased. These two pressures make finding affordable housing even tougher for the very poor households in America. For every 100 extremely low-income (ELI) renter households in the country, there are only 29 affordable and available rental units. Extremely low-income households—a definition used by the U.S. Department of Housing and Urban Development (HUD)—earn 30 percent of area median income or less. Depending on the area of the country, for a family of four, this translates into incomes of less than $7,450 to $33,300.

Not one county in the United States has an even balance between its ELI households and its affordable and available rental units. As a result, ELI households have to search harder for a place to live, spend more than 30 percent of their income on rent, or live in substandard housing.

Some markets are tighter than others. Of the top 100 U.S. counties in 2012, Suffolk County, Massachusetts, has the smallest gap in units that are affordable and available for ELI households; Cobb County, Georgia, has the largest. But does this mean ELI households in Suffolk County have it easy? The answer is no. Even in Suffolk County, which is home to Boston, only 50 units are affordable and available for every 100 families earning $29,350.

This situation would be much worse without HUD rental assistance, which we estimate provides almost 3.2 million affordable and available units to ELI households. HUD assistance comes in three forms: public housing, Housing Choice Vouchers, and privately owned but federally assisted housing. Without HUD rental assistance, we estimate that there would be 1 affordable and available rental unit for every 100 ELI households in the United States. The number would drop from 50 to 7 rental units for every 100 ELI households in Suffolk County, where an estimated 85 percent of the affordable and available rental housing for ELI households is federally assisted.

Why isn’t the private market filling this gap? The answer is relatively simple. With a few exceptions, the economics do not pencil out. Without subsidy, private developers cannot build or operate a new unit of rental housing at a cost ELI households can afford to pay.

The good news is some counties have been closing the affordability gap, including places like Suffolk County, Massachusetts, and Hennepin County, Minnesota, which is home to Minneapolis and its surrounding suburbs. Over the past decade, these two communities have engaged in intensive state and local efforts to preserve existing federally assisted housing that have stemmed the tide of losses. In addition to federal assistance, stakeholders in these communities invest significant state, local, and philanthropic resources in affordable housing serving ELI households.

Other counties have been losing significant ground. Wayne County, Michigan, and the District of Columbia offer two examples of how the affordability gap can widen under two dramatically different sets of market conditions: a really weak market, where incomes are low and lower-cost units are dropping out of the stock, versus a hot market where incomes are better but rents are rising faster. Wayne County (where Detroit is located) lost just over 22,400 rental units that are affordable and available to ELI households, likely due to demolitions of rental housing, but added approximately 10,700 ELI households competing for the units that remained. Between 2000 and 2012, DC lost approximately 8,000 units that are affordable and available for ELI households, likely due to gentrification, while losing just over 2,000 ELI households. DC’s overall affordability gap worsened during this period; in 2012, 23 percent fewer units are affordable and available for every 100 ELI households. That said, it is still near the top of the largest 100 counties with the highest number of units that are affordable and available for ELI households.

To zero in on trends for your own region, we encourage you to explore this new interactive map.

The Urban Institute will update this map periodically. And, as data become available, we will track the affordability gap for ELI households, as well as very low-income and low-income households.

The Assisted Housing Initiative is a project of the Urban Institute, made possible by support from Housing Authority Insurance, Inc. (HAI, Inc.), to provide fact-based analysis about public and assisted housing. The Urban Institute is a non-profit, nonpartisan research organization and retains independent and exclusive control over substance and quality of any Assisted Housing Initiative products. The views expressed in this and other Assisted Housing Initiative commentaries are those of the authors and should not be attributed to the Urban Institute or HAI, Inc.

As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research.

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Comments

Will:

Although the District of Columbia Housing Authority wait list is closed, it only means that new applicants will not be added to the waitlist until such time as they have cleaned it up (removing those who have died, are otherwise housed, etc.). They are still serving those already housed under their programs, so your post is inaccurate. Additionally, there are other agencies through which District residents can seek housing or housing subsidies besides the Housing Authority.

The private market does not supply the needed housing because the economics "do not pencil out." It's awesome to see this acknowledgement of the reality that economic forces beyond the control of regulations are at work here.

The problem is the lack of critical thinking about the next sentence: "Without subsidy, private developers cannot build or operate a new unit of rental housing at a cost ELI households can afford to pay."

That is not a scientific conclusion. It's a policy choice that assumes that subsidies are the only way to change the economics. But supply and demand tells us that the price of something goes down when supply goes up. Furthermore, lowered demand makes prices go down. The answer is obvious: a large supply of housing that is in low demand.

Currently, we make housing undesirable by moving it away from jobs, transportation, and government services. Thus the poor live where they are doomed to stay poor.

How do we generate undesirable units that are close to jobs and services? We can't because zoning laws require that a. you are not allowed to add housing units in desirable areas, and
b. if you do, they must be extremely desirable (i.e., expensive).

How do you make undesirable housing that is not sub-standard? You make it small. We need laws that allow for the construction of units too small to attract the rich, but in neighborhoods where the rich already live.

Big buildings with lots of too small units are economically viable for developers even without subsidies.

If I am reading the report correctly there are 45 available units for every 100 low income renters in D.C. IF you have a subsidy. If you do not have a subsidy- there are only 2 available units for every 100 people. The problem in D.C. is the wait-list for subsidized housing is closed and numbers 70,000 people. Therefore, DC really does not measure up well because it currently provides no subsidies. Not sure why the Urban Institute choose to release findings this way. Seems a little misleading.

Decade after decade the government has spent billions of dollars building low income housing and within a decade whatever they have built is trashed by the people living there. The Robert Taylor Homes in Chicago were like a country club when they opened in 1962, the first families that moved in there were thrilled with their new modern apartments. By 1970 they were trashed out drug nests of crimes. This has happened over and over again, so obviously the government building and operating housing does not work. The section 8 voucher program is filled with fraud and abuse, if you google section 8 fraud you get page after page of stories from all over the country about millions in dollars being embezzled by H.A. employees and their cronies, so that is not working either. The answer needs to come from the private sector and by that I mean churches and charitable organizations working with private developers and local governements to give developers incentives to build more low income housing. With the new Republican led Senate and House being sworn in next Monday, the funds the federal government supplies is only going to be decreased. They want to eliminate HUD and I bet they will do it or dismantle it to a useless entity.