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15th June
2010
written by naehblog

Today the Joint Center for Housing Studies at Harvard University released their annual State of the Nation’s Housing report – an assessment of the American housing market for the past year.

Overall, the report offered mixed news. In the executive summary – entitled, “The Fledgling Recovery”—the report noted that the economy has started to show indications of a recovering housing market, including increased employment rates and reduced house prices. The report is also careful to note, however, that strength in the housing market will heavily depend on a recovery in the unemployment rate, which is currently holding steady at just under 10 percent.

While the big picture offered some interesting insights, what was most striking in the report [at least for us] was the state of affordable housing for low-income households. The picture may look mixed for the majority of Americans – but the outlook is notably less rosy for low-income households.

It starts with the rental market. Most low-income households are renters and the report definitively states that the supply of low-cost rental housing continues to decline. In fact, housing units considered affordable for those earning the federal minimum wage – rents of $400/month or less – declined by 244,000 units in 2007.

At the same time, the number of renters rose over the last year, in some part because of the pressures in the homeowners market. A significant portion of that of that increase is attributed to minority and immigrant households though the report also notes that elderly renter households will rise dramatically – by more than 3 million – as the baby boomer generation ages.

But the real story is in cost-burdened households.

The percentage of Americans living with severe housing cost burden (paying 50 percent or more of their monthly income on rent) stayed at a steady 12 percent for two decades – from 1980 to 2000. In 2008, that percentage shot up by a third to 16 percent. According to the report, a record 18.6 million households faced severe housing cost burdens this year – an increase of 4.7 million since 2001.

Sadly, the group most affected by severe housing cost burden is single-parent families with children. These households require more – more space, safer neighborhoods, better schools – but are restricted by a single-income. In 2008, half of low-income single-parent households spent 63 percent of their monthly income on housing. Minority households often spent more.

The story doesn’t improve from there. The housing report goes on to highlight other challenges presented to low-income and cost-burdened households. It’s a song that’s been sung before: affordable housing grows scarcer and scarcer and real incomes stay ever more stagnant.

Perhaps the most resonating message from this section of the report, however, is the rigid persistence of housing cost burdens over the years. Many economic indicators fluctuate; there are often breaks in data reflecting changes in the financial market, world events, or a shift in industry.

This is not the case for severe housing cost burden. Since the 1960s, the report notes, housing cost burden for the bottom income quartile has only become more and more severe.

The connection to homelessness couldn’t be clearer: as individuals and families struggle to cope with an ever-bleaker affordable housing landscape, the risk of homelessness grows. In order to prevent and reduce homelessness, we must – with great urgency – address the clearly critical need for more affordable housing.

For the full report, please visit the Joint Center for Housing Studies website. For more information about the relationship between homelessness and housing, please visit ours.

1 Comment

  1. [...] love this report. I started reading it last year and while the prospects never look good, the report is a wealth of information about the housing [...]