The Mortgage Bankers Association (MBA) recently released a report titled, Mind the Gap: A High-level Review of the Need for — and Supply of — Affordable Multifamily Rental Housing. Drawing on several data sources, the report shows the affordable housing needs of low income households, seniors, people with disabilities, veterans, and people with AIDS, finding that there is a significant gap between the need for and supply of affordable housing.
Mind the Gap highlights the gap that exists between the incomes of many households and the cost of building and maintaining safe and decent housing. MBA found that there were more than 18 million households with incomes of $20,000 or less in 2012, with 82% of these households spending 30% or more of their income on housing costs. The report cites analysis by Freddie Mac showing that the number of multifamily renters with incomes at or below 50% of the area median income grew 14% from 2007 to 2011, while the supply of adequate and available multifamily rental units affordable to these households increased by just 4% over the same period.
Mind the Gap also examines the need for homes suitable for elderly people, people with disabilities, veterans, and people with AIDS, groups with unique needs not met by the housing market. MBA reviewed research from HUD showing that the U.S. population aged 65 and over is projected to double to 80 million and increase from 13% to 20% of the total population by 2040. The existing housing stock is not sufficient to meet the needs of such a large senior population. MBA also looked at research from the National AIDS Housing Coalition that highlighted how critical housing is to the health and quality of life for people living with AIDS. Approximately half of all people living with HIV/AIDS will require housing assistance at some point during their illness.
The report also cites a study conducted by Harvard’s Joint Center for Housing Studies that shows rents rising 5% from 2001 to 2013 while renter incomes fell 10%. MBA notes that vacancy rates are at low levels not seen since 1985. The development of multifamily housing has not kept pace with demand, leading to a tight rental market and increased rental housing costs. MBA also observes that while new multifamily construction is on the rise, it has failed to accommodate household growth or replace the hundreds of thousands of units removed from the stock.
Throughout the report, MBA highlights existing federal programs that address all of the housing needs discussed and emphasizes the importance of these programs, while noting that the programs do not serve all those struggling to meet their housing costs. In order to address these challenges, the report recommends utilizing Federal Housing Administration and Fannie Mae and Freddie Mac loan programs and financing tools to increase construction in the affordable housing market.
The full report is at http://mba.informz.net/MBA/data/images/datanote21915.pdf