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27th April
2011
written by Pete Witte

Today’s guest post comes to us from Pete Witte, research associate at the Alliance.

I wasn’t surprised while reading the recent report, America’s Rental Housing: Meeting Challenges, Building on Opportunities, by the Joint Center for Housing Studies (JCHS) of Harvard University. Among other things, the paper points out that there is a substantial—and growing—gap between the number of very low-income renters and available affordable rental units. But though the report is unsurprising, it’s disconcerting nonetheless.

In the State of Homelessness, we found that from 2008 to 2009, the number of poor, severely housing cost burdened renter households increased by 9 percent to nearly 5.9 million households nationally (severe housing cost burden = households paying 50 percent of their monthly income or more on rent). Families are finding it difficult to afford rents and the recent JCHS paper points out that, in part, rents are rising due to a lack of supply and increasing demand.

These factors reveal that there are more and more people at increased risk of homelessness When households pay such a great majority of their monthly income on rent (50 percent or more, in the case of severely housing cost burdened households), they have little money left over for other expenses, including transportation, healthcare, education, and food. The scarcity of resources means that that any unforeseen financial hurdle – a large bill, car breakdown, hospitalization – could jeopardize the household’s housing situation.

The JCHS paper also predicts that “Given the long lead times needed to develop new multifamily housing, a sharp increase in demand could quickly reduce vacancy rates and put upward pressure on rents.” The authors call the growing problem an “affordability crisis.”

And I agree.

As the U.S. population continues to grow, so will the number of renter households. JCHS estimates that growth of renter households could number as many as 470,000 annually. How many of these new renter households will be severely housing cost burdened? Will the affordable housing supply gap continue to grow? How many people will find themselves doubled up or in shelters because they can’t find or keep housing that they can afford?

Solving the problem of creating more affordable housing is not an easy one. I can tell you that from my past experiences, when I worked as an urban planner, the question of how to increase the level of affordable units in any particular community is always challenging to answer.

JCHS mentions that one solution is through policy. Public policy can encourage the expansion of affordable housing stock by using tax and regulation breaks to encourage investments in affordable housing. Providing incentives for including affordable units in new development is a practice that a number of communities (for example, locally in Montgomery County, Maryland), and I think this is one way to help keep the gap from growing.

Policymakers could also further invest in housing vouchers. JCHS points out that only 1 in 4 of the lowest-income renters eligible for housing assistance are provided federally assisted housing. Clearly, providing financial assistance in the form of vouchers would go a long way toward closing the affordability gap. And since people with vouchers do not become homeless, we know that vouchers also will also help end homelessness.(The Alliance produced an eviction prevention series highlighting the utility of vouchers earlier this month.)

We want to know what’s happening in the field! Are you experiencing a rise in rental prices? Do you think housing vouchers can make a difference? Are you concerned with the growing dearth of housing affordable to low-income people and families? Let us know in the comments.

6 Comments

  1. 27/04/2011

    Another suggestion: Create a policy whereby it is feasible to attract very small investors ($200-$500)under some type of Corporate/LLC/Investment Group so as to purchase property without a mortgage. The property owners would agree to a specified period of ownership for designated low-income and/or rapid-re-housing use at much reduced rents for favorable tax considerations. An eventual sale may only allow for a principal payback, but the tax breaks and the social benefits on a small investment might be very appealing to many people. The tax and estate lawyers keep coming up with reasons why this won’t work. Perhaps naive, I think it would! Thanks!

  2. Carole
    27/04/2011

    Being on a fixedincome, mostly, i need dependable housing that does not break the bank if you will… Itruly care about the plight of the homeless and pray one day and soon they will ALL have a roof over their heads… Therich get richer and the poor get poorer….

  3. 27/04/2011

    I have a suggestion, expand your sharing options for your blog. Like WordPress, Blogger, MySpace etc. Because you do a great job and I’m sure a lot of people would like to help you spread your message.

    Just trying to help.

    Erik S

  4. naehblog
    28/04/2011

    Mike: Very interesting, a micro-lending business for affordable housing!
    Erik: Thank you for the feedback! A “share” button might help us spread the word.

    -Anna

  5. [...] this week, Washington Post reporter Dina ElBoghdady covered the Harvard University study that we blogged about on Wednesday. The study found that in 2009, nearly half of all renters were moderately cost [...]

  6. [...] Pete Witte at the National Alliance to End Homelessness adds, these households are at high risk of homelessness. One extraordinary event — the car dies, [...]