Harvard’s Joint Center for Housing Studies (JCHS) will release its State of the Nation’s Housing 2011 report the morning of Monday, June 6. NLIHC President and CEO Sheila Crowley will speak at the press event in New York City at which the report is released.
The annual report provides a concise summary and analysis of recent trends and emerging issues in the nation’s housing markets and a discussion of what might be expected in the coming year. The report finds that some indicators of a housing recovery were taking shape in early 2011, but these indicators remain few.
JCHS found that both rental and owned housing have become unaffordable for millions more Americans in recent years. Construction and land costs for units in new multifamily structures averaged $110,000 in 2009, and the median asking rent was $1,067. To be affordable to the median renter (at the 30% of income standard), however, the rent would have to be lower at $775 or less. In 2009, 19.4 million households— 9.3 million owners and 10.1 million renters— paid more than half their incomes for housing. While low income households remain the most likely to have such severe burdens, cost pressures have moved up the income scale in the past decade.
At the same time, many of the country’s lowest-cost rentals are being permanently lost from the stock, largely because the rents they bring in cannot cover the costs of adequate maintenance. The authors’ analysis of the 2009 American Housing Survey indicates that despite the net addition of 2.6 million rentals, the number of units with rents of $400 or less in 2009 inflation-adjusted dollars fell from 6.2 in 1999 to 5.6 million in 2009. By 2009, nearly 12 percent of the low-cost rentals that existed in 1999 had been lost—twice the share lost among units renting for $400-799, and four times the share lost among units renting for $800 or more. Many of the low-cost rental units that remain are in older, distressed buildings.
According to the report, the growing number of low income renters adds to the pressure on the affordable housing stock. Between 2003 and 2009, the number of renters with very low incomes (below 50% of area median) jumped from 16.3 million to 18.0 million. Meanwhile, the number of housing units that were affordable to households at that level, in adequate condition and not occupied by higher income renters, fell from 12.0 million to 11.6 million. The affordable housing shortage for this group thus widened sharply from 4.3 million to 6.4 million units.
JCHS also found that low income families with children have an especially difficult time finding affordable units, with nearly two-thirds paying more than half their incomes for housing in 2009. The number of children living in such households stood at 9.2 million that year, up 12.2% from before the financial crisis in 2007 and up fully 35.1% from 2001. With so many families struggling to make ends meet, it is no surprise that the number of families using homeless shelters is also on the rise. Although the incidence of chronic homelessness fell, the number of families with children that used homeless shelters at least once increased by about 30% from 2007 to 2009, to more than 170,000.
The researchers found that federal housing assistance programs provide critical support to millions of America’s poorest and most vulnerable households. At roughly $7,000 per year, the average HUD rent subsidy is a significant benefit for some 5 million households. Other federal assistance programs help up to 2 million more struggling households. The authors report that the Center on Budget and Policy Priorities estimates that counting housing assistance as income would have lifted 1.5 million persons above the poverty line in 2009.
However, rent subsidies are not an entitlement and only reach approximately one in four eligible households. As the number of low income renters has grown over the past decade, federal support for assisted housing has failed to keep pace. During the 1970s, the number of assisted renters increased by 228,000 a year on average, but additions slowed to 121,000 annually in the 1990s and to just 74,000 per year in the 2000s. Despite the growing need for rental assistance, the current budgetary climate makes increased federal support unlikely.
“If only every Member of Congress would take the time to read this report, perhaps some would rethink the reckless insistence that the federal budget deficit be solved with cuts in spending only. This report reinforces the position that programs that help low income Americans, including low income housing assistance, should be off the table in deficit reduction negotiations. Moreover, increased investment in the production and rehabilitation of housing that is affordable for low income families would relieve the shortage of affordable homes and put millions of homebuilders back to work,” said Ms. Crowley in prepared remarks.
The report will be available at http://www.jchs.harvard.edu/ after 11 am ET on June 6.