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Housing Problems of Very Low-Income Renter Households

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Housing Problems of Very Low-Income Renter Households

Front Cover of Worst Case Housing Needs: 2015 Report to Congress

HUD’s Worst Case Housing Needs: 2015 Report to Congress is a nationwide assessment of severe housing problems facing very low-income renter households in 2013 based on American Housing Survey data. Very low-income renters are those who earn less than 50 percent of the area median income (AMI), and include a significant proportion of extremely low-income renters (who earn less than 30 percent of AMI). Households with worst case needs are defined as very low-income renters who do not receive government housing assistance and who pay more than 50 percent of their income for rent, live in severely inadequate conditions, or both.

This biennial report investigates causes and trends in worst case housing needs, with special emphasis on changes during the 2011 to 2013 period, by examining the extent of these needs as well as the availability of affordable rental housing. An affordable housing unit is defined as one whose total rent (rent plus utilities) does not exceed 30 percent of the household’s maximum income. The report describes the prevalence of worst case housing needs by demographic category, assesses the supply of affordable housing by geography and income level, and analyzes the relative influence of demographics, market conditions, and the supply of government-provided housing assistance.

Major Findings

The researchers discovered a modest but significant decline in the number of very low-income rental households experiencing worst case housing needs from 2011 to 2013. In 2013, 7.7 million very low-income renter households, or 41.7 percent of the very low-income renter population, had worst case housing needs. The number represented a 9 percent decline from a record high of 8.5 million in 2011 and the first decline in worst housing needs since the 2005 to 2007 period. Between 2007 and 2011, the economic and foreclosure crises triggered a 43 percent increase in worst case housing needs. Although the decrease during the latest period suggests that economic recovery has benefited low-income renter households, the number of U.S. renters encountering housing problems remains high across population subgroups, household types, and geographies.

  • The primary cause of worst case housing needs, affecting 97 percent of cases, was severe rent burden (households paying more than 50 percent of their income in rent); severely inadequate housing without severe rent burden was responsible for 3 percent of the total. The relatively small percentage of worst case needs caused by inadequate housing reflects an overall improvement in the quality of the housing supply in the past few decades. The physical adequacy of rental housing options for extremely low-income renters, however, remains a concern. Researchers apply the concepts of affordability, availability, and adequacy when comparing the number of extremely low-income renters with the number of units available to them. Using these three measurements, researchers found that 12 percent of affordable and available units for extremely low-income renters had severe deficiencies.

  • Of four household types, families with children accounted for the largest share (40%) of worst case housing needs in 2013. The number of worst case needs among families with children decreased by 12 percent since 2011, and the proportion of very low-income renter families with children that experienced worst case needs in 2013 decreased by 2.5 percentage points as the proportion with housing assistance increased by 1.5 percentage points. Declines in worst case needs were also evident in terms of race and ethnicity. From 2011 to 2013, worst case housing needs as a proportion of very low-income renters decreased by 1.9 percentage points for non-Hispanic whites, 4.0 points for non-Hispanic blacks, and 1.3 points for Hispanics. In addition, 14 percent of the 7.7 million renters with worst case housing needs were nonelderly people with disabilities; the number of worst case needs among such households was 17 percent less than in 2011 but 10 more than in 2009.

  • According to the researchers, 70 percent of the reduction in worst case housing needs cases during the time period can be attributed to demographic changes. Increases in the overall number of households and the share of households who are renters contributed to increases in worst case housing needs by adding demand for rental units. But these trends were offset by two other factors: an increase of 7.2 percent in median renter income between 2011 and 2013 and an increase in the proportion of very low-income renters receiving housing assistance. The net effect of these demographic changes reduced the very low-income population susceptible to worst case housing needs while also contributing to a modest decline in the prevalence of worst case housing needs among that population.

Implications

Although the overall decline in worst housing needs between 2011 and 2013 is encouraging, several observations from this report illustrate that worst case housing needs remain a national problem. In assessing rental units nationwide that were available and affordable at rent levels for different income categories, researchers discovered that higher-income renters occupied 40.8 percent of units affordable to extremely low-income renters. Moreover, 65 units were affordable and available per 100 very low-income renters, declining to only 39 affordable and available units per 100 extremely low-income renter households. In addition, the rental vacancy rates in 2013 show that the most affordable units are those least likely to be vacant. Only 5.1 percent of units affordable at income levels between 0 and 30 percent of AMI were vacant compared with 11.6 percent of units at the highest rent levels. To address this variation in vacancy rates, the report notes that housing vouchers can make vacant units with higher rents available to very low-income renters. In addition, of the 18.5 million very low-income renters in 2013, 41.7 percent experienced worst case housing needs and did not receive assistance compared with 25.7 percent of households who did. These findings confirm that a comprehensive housing assistance strategy at the federal, state, and local levels is needed to address the affordable housing gap.

 
 
 
Published Date: June 15, 2015


The contents of this article are the views of the author(s) and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. Government.