HUD Reports Record Increase in Housing Unaffordability for Low Income Renters

WASHINGTON, D.C. – February 26, 2013 – (RealEstateRama) — Low income renters in the United States are experiencing record rates of unaffordable housing costs, according to a new report from HUD. The report, Worst Case Housing Needs 2011, shows 8.48 million renter households experiencing “worst case housing needs,” a 19% increase since 2009 and a 43.5% increase since 2007.

Worst case housing needs are experienced by very low income renters who pay more than half of their income for housing or living in severely inadequate housing conditions or both. Very low income is defined as household incomes at or below 50% of the area median income. Congress requires HUD to report on worst case housing needs every two years.

“The new Worst Case Housing Needs report is further evidence that low income renters have the most severe housing problems in the United States. The entrance of former homeowners into the rental market is driving up costs for what little rental housing there was that low income people could afford,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition, a housing research and policy group. “The shortage of housing affordable to the lowest income renters is a national scandal that cannot be ignored any longer. It is the reason that people are homeless in every community in the country.”

In a report released today, the Bipartisan Policy Center’s Housing Commission presented recommendations for improving the nation’s housing market. The BPC Housing Commission report included a welcome focus on the rental housing needs of extremely low income people, but the recommendations fell short of what is necessary to address the shortage of rental housing affordable to the lowest income Americans.

“The BPC report concurs with the Worst Case Housing Needs report that the scarcity of rental housing for the lowest income people is acute and recommends universal access to rental assistance for extremely low income households, a worthy goal,” said Crowley “But the commission stops short of saying how to achieve its goal despite describing the urgency of the problem.” Citing federal fiscal constraints, the commission recommends “its approach for meeting the needs of the nation’s most vulnerable households be phased in over time.”

The BPC report offer changes to the federal housing tax expenditures as a potential source of funding for addressing the affordable rental housing shortage, but offer no specific guidance on changes.

The National Low Income Housing Coalition proposes two changes the mortgage interest deduction: Reduce the size of a mortgage eligible for a tax break to $500,000 and convert the deduction to a 15% non-refundable tax credit. Taken together these changes would produce $200 billion in savings over ten years.

“The findings of the Worst Case Housing Needs 2011 report must be amplified loudly across the land and through the halls of Congress to finally wake us up to the gross inequities in federal housing subsidies and the imperative to act now to end and prevent homelessness in the United States of America,” said Crowley.

Contact:
Amy Clark, , 202.662.1530 x227

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