HUD issued its twelfth “Worst Case Housing Needs” in the last week of May. The report states that there were 5.91 million households, comprising 12.97 million people, with worst case housing needs in 2007, based on analysis of American Housing Survey data. The definition of worst case is a very low income renter household that did not receive housing assistance, and that paid more than half of its income for housing, lived in severely inadequate housing, or both. HUD is required by statute to report to Congress on “worst case housing needs” every two years.
The number of worst case needs households in 2007 fell by a statistically insignificant 1.5%, from 5.99 million in 2005.
As in recent years, severe cost burden, i.e., spending more than half of one’s household income on rent and utilities, is the primary cause of worst case housing needs. Of the 5.91 million households, just 190,000 had inadequate housing and 240,000 had inadequate housing and severe cost burden. Worst case needs are found across family types, with particular concentrations among families with children (37%) and the elderly (20%). Forty-six percent of the households with children had earnings consistent with working full-time at the minimum wage. Based on the current incidence of severe problems among the unassisted population, HUD estimates that 2.74 million households would have severe problems if their assistance were withdrawn.
Of the 5.91 million worst case needs households, 73% are extremely low income (ELI; earning 30% AMI or less) and 27% are very low income (VLI; 31% to 50% AMI). Among all ELI households, almost half (48.6%) have worst case needs, while 23.6% of all VLI households do.
Caution is suggested in interpreting changes from 2005 to 2007, due to a number of methodological changes between the 2005 and 2007 AHS. As the report notes, though the economy was stronger than it is today, from 2005 to 2007 the number of renters increased significantly by more than 1.2 million households, and even if the proportion of ELI renters decreased in this period, the number of ELI renters would be expected to increase. HUD also changed its questions related to household income and subsidy status. Finally, the methods used to determine HUD income limits, which are used in the study, also changed in this period; as a result, the income limits stayed largely flat as median incomes continued to increase.
These changes are discussed in Appendices C and D in the report.
One further methodological difficulty to note, which is not discussed in the report, is that the version of the 2007 American Housing Survey used in this report has some responses mistakenly coded as being in non-metropolitan areas, which may skew the weighting and some results. The team working on the report determined there was not sufficient bias to rerun the analysis with the corrected data.
Worst Case Housing Needs 2007: A Report to Congress can be found at: http://www2.huduser.org/portal/publications/ affhsg/wc_HsgNeeds07.html