The Joint Center for Housing Studies of Harvard University (JCHS) released The State of the Nation’s Housing 2018 on June 19. This year’s release marks the 30th anniversary of this annual report, which examines national trends in housing market conditions. Since the study’s inaugural release in 1988, the number of households burdened by housing costs in America has risen by nearly 14 million. The lack of affordability, high housing cost burdens, and inadequate federal assistance are serious issues for the lowest income renters.
The report documents the dramatic increases in rents compared to incomes in the U.S. since 1960, during which median earnings increased 5% while rents rose 61%. The number of low income families increased by 6 million nationally since 1988, while the number of apartments renting below $800, affordable to households making $32,000 or less, declined by more than 2.5 million between 1990 and 2016.
According to the report, the share of renter households declined slightly from 2016 to 2017, from 36.6% to 36.1%. The share of renters decreased in more affordable metro areas in the South, but remained elevated in larger, high-cost metro areas. Multifamily construction is higher than at any point since the 1970s and construction is slightly outpacing demand. Vacancy rates were up 0.3% in the first quarter of 2018 compared to a year earlier.
Despite an overall softening of the overall rental market, however, the market is not serving the lowest income households. In 2016, only 35 available rental units were affordable for every 100 extremely low income (ELI) renter households, those earning less than the poverty level or 30% of the area median income (AMI). There is a nationwide shortage of more than 7.2 million rental homes affordable and available to ELI renter households.
Near-record numbers of renter households remain cost-burdened, paying more than 30% of their income for housing. In 2016, approximately 20.8 million households were cost-burdened and 11.0 million were severely cost-burdened, spending more than half of their incomes on housing. According to the report, 80% of renters making less than $30,000 per year are cost-burdened. The lowest income cost-burdened households are left with few resources for other necessities like food, transportation, and healthcare. For these cost-burdened renter households, an emergency expense or unexpected loss of income could result in eviction and homelessness. After a decline of 14% between 2010 and 2016, the homeless population increased by 3,800 people in 2017.
Despite the increasing need, federal rental assistance is grossly insufficient. Only one out of every four very low income (VLI) renter households, those at or below 50% AMI, receives housing assistance. From 1987 to 2015, the number of VLI households grew by 6 million, while the number receiving housing assistance increased by only 950,000. The share of these households receiving assistance declined from 29% to 25%.
The report also discusses the state of homeownership in the U.S. The national homeownership rate increased to 64.2% by the fourth quarter of 2017 from a 50-year low of 62.9% in the second quarter of 2016. The current homeownership rate is comparable to that of the late-1980s and mid-1990s. Though the homeownership rate appears to have stabilized, other challenges remain. Issues such as tight credit, limited inventory, potential increases in interest rates, and student debt could constrain further growth in homeownership, especially for low and moderate income households. Homeownership rates for younger households and black households are near 30-year lows, and the ownership disparity between black and white homeowners is growing.
The State of the Nation’s Housing 2018 can be found at: https://bit.ly/2I2W7EG
Read NLIHC’s press release on the report at: http://nlihc.org/press/releases/10890