Worst case housing needs -- which by definition characterize unassisted very-low-income renter households that pay at least half of their income for rent or live in severely inadequate housing -- continue to be concentrated at the lowest income levels. Over three-fourths of households with worst case needs have incomes below 30 percent of the area median, and the incidence of severe problems declines rapidly as income rises. Elderly and disabled households are particularly disadvantaged: almost 1.2 million households with acute housing problems are headed by an elderly person and almost 1 million have an adult member with a disability.

Despite perceptions to the contrary, almost 2 million of worst case needs households are working. One-third of the extremely-low-income families with children worked part-time and one-fifth worked full-time at minimum wage jobs. Raising income eligibility -- in the name of helping the working poor -- would instead divert resources from the workers who most need housing assistance.

The report shows that private housing market production is not adequately meeting these renters' needs. In 1993 there were 1.7 million fewer units affordable to households with incomes below 30 percent of the area median than there were renters at that income level. The current report analyzes the reasons for these shortages, finding that they mainly develop through the filtering up of rents. Few affordable units actually drop out of the housing stock.

The 1996 report, HUD's fourth worst case needs study since 1991, includes 1993 American Housing Survey (AHS) data gathered by the U.S. Bureau of the Census and reanalyzes earlier AHS data to track trends in the worst case population between 1978 and 1993. AHS data are supplemented with data from other sources. Using new HUD program data, this report shows how well HUD programs are serving households that would otherwise have acute needs for rental housing assistance. The study also uses Social Security Administration data to identify more completely the severe housing needs of persons with disabilities.

To assist families with worst case needs for housing assistance, the report recommends that the Federal Government increase rental assistance to complement programs that supply rental housing. Without tenant-based assistance, it states, extremely-low-income households may not be able to afford housing created by programs such as the HOME Investment Partnership and the Low Income Housing Tax Credit programs. The report further recommends that rental assistance programs continue to target households with the lowest incomes. More than 7 of every 10 households assisted by public housing and Section 8 programs have incomes below 30 percent of the area median.

This report is part of the collection of Affordable Housing & Worst Case Needs Reports to Congress.