The nation continues to have a significant shortage of affordable and available units for the nation’s lowest-income households, according to a new report from the National Low Income Housing Coalition (NLIHC).
With nearly 43.2 million renter households in the nation, 10.4 million are considered extremely low-income, meaning they earn 30% or less of the area median income (AMI). Of those households, 4.1 million were considered deeply low-income, earning at or below 15% of the AMI.
According to The Gap: The Affordable Housing Gap Analysis 2016, the nation has 5.8 million affordable housing rental units for extremely low-income households. Even though that number is not enough to meet the need, the supply decreases even more with 2.6 million of those affordable units being occupied by higher-income households, leaving only 3.2 million affordable and available rental units for extremely low-income households. This translates to 31 affordable and available rental units for every 100 extremely low-income households or a shortage of 7.2 million affordable and available homes for extremely low-income families.
The numbers are even more dire for households with deeply low incomes. Only 17 affordable rental units are available for every 100 deeply low-income households.
For the report, the NLIHC uses data from the 2014 American Community Survey, which only includes households with addresses, excluding the homeless population. If you factor in the Department of Housing and Urban Development’s annual Point-in-Time count, more than 422,000 households were homeless on a given night in January 2015, bumping the shortage of available affordable rental units for extremely low-income households from 7.2 million to over 7.6 million.
With the shortage of affordable housing, the majority of extremely low-income households suffered housing costs burdens. According to the report, 90% of deeply low-income renter households and 75% of extremely low-income renter households were severely cost burdened, meaning they spend more than 50% of their income on rent and utilities.
Extremely low-income renter households with severe costs burdens have little left over to make ends meet, spending less on food, health care, and transportation.
The NLIHC’s analysis also found that no state or the District of Columbia has an adequate supply of affordable housing for extremely low-income and deeply low-income households.
Nevada had the least adequate supply, with only 17 affordable and available units for every 100 extremely low-income households, followed by Alaska, California, Arizona, Florida, and Oregon.
On the deeply low-income side, Alaska had only five affordable units available for every 100 households, followed by Wyoming, Wisconsin, Iowa, Delaware, and Nevada.
According to the report, Nevada had the largest percentage of severely cost-burdened extremely low-income renter households at 85%, followed by Florida Georgia, Oregon, and Arizona. Alaska had the highest percentage—97%—of severely cost-burdened deeply low-income renter households, followed by Nevada, Florida, Georgia, and Louisiana.
On the metro side, Orlando, Fla., and Las Vegas had the least adequate supply for extremely low-income renters, with only 15 affordable and available rental units for every 100 households. Orlando also had the least adequate supply for deeply low-income renters, with only five affordable units available for every 100 households.
The NLIHC report expresses optimism for reducing the shortage, touting the National Housing Trust Fund (NHTF) as a solution. This is the first new source of federal funding specifically targeted to the expansion of affordable housing for extremely low-income households. At least 75% of the funds must be used for rental housing benefiting these households.
The NHTF is mandated by Fannie Mae and Freddie Mac contributions, and NLIHC estimates approximately $173.7 million will be distributed this year. With efforts to reform the government-sponsored enterprises and other housing finance and tax reform efforts, over $200 billion in new revenue could be generated for the NHTF over the next decade, providing additional affordable housing for extremely low-income households.
“Given its potential to capture significant revenue streams through housing finance and tax reform efforts, the NHTF is an ideally suited tool to realign and expand federal resources to address the most critical housing needs,” stated the report. “Moreover, expanding the supply of affordable rental housing allows extremely low-income households to move out of their unaffordable housing, making these units available to other income groups.”