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.