NLIHC’s latest Housing Spotlight provides new evidence of the deepening housing shortage nationwide. In 2011, the number of extremely low income (ELI) renter households, with incomes at or below 30% of the area median income (AMI), reached 10.1 million. Yet, there were only 3 million units both affordable and available to these families. Over three-quarters (76%) of ELI households face a severe housing burden, paying over 50% of their income towards rent and utility costs alone. These households have little income left over for other expenses, and face an increased risk of homelessness. NLIHC’s new research demonstrates that the housing market fails to address the needs of ELI renters, and argues that funding the National Housing Trust Fund (NHTF) must be prioritized to address these unmet needs. The data in this Housing Spotlight are based on analysis the 2011 American Community Survey.
The number of renter households rose by one million nationwide between 2010 and 2011. ELI households drove 36% of this growth. Yet, most new units (61%) were priced for those with incomes above 80% of AMI. With few new units catering to ELI renter households, the affordable housing shortage intensified. Further exacerbating the problem is the fact that 45% of units affordable to ELI households are actually occupied by renters with higher incomes. After taking this into account, NLIHC finds that in 2011, there were only 30 affordable and available units for every 100 ELI renter households. Households with incomes at or below 50% of AMI also face a housing shortage: there are just 57 affordable and available units per 100 renter households below this income threshold.
With so few affordable units available on the market, ELI renters are frequently forced to spend a majority of their limited income on housing costs. Of 11.2 million renters with severe housing cost burden, 68% are ELI and 24% have incomes between 30% and 50% of AMI.
Along with the analysis of the affordable housing shortage at the national level, NLIHC provides some state-level analysis in this Housing Spotlight. The percentage of ELI renters with severe housing cost burden ranges from 55% in South Dakota to 88% in Nevada. States in the West and Southwest tend to have the fewest number of affordable and available rental units to their ELI renters. In no state is there a sufficient supply of affordable units available to ELI renters.
The brief concludes with a discussion of a solution to this problem. The National Housing Trust Fund (NHTF), when funded, will secure a dedicated source of funds for production, rehabilitation and preservations of rental homes for ELI and VLI households specifically. NLIHC proposes reforming the mortgage interest deduction by converting it into a 15% non-refundable credit, reducing the size of a mortgage eligible for a tax break from $1 million to $500,000 and using the savings generated to fund affordable housing through the NHTF.
Click here to read Housing Spotlight: America’s Affordable Housing Shortage, and How to End It.
Click here to view NLIHC's press release on the report.