For more than 30 years, the National Low Income Housing Coalition (NLIHC) has employed varying measures and data to assess the affordability and availability of rental housing for different income groups. Since the mid-2000s, NLIHC has used the American Community Survey Public Use Microdata Sample (ACS PUMS) for such an analysis which it publishes in The Gap report. The report also includes data on housing cost burden prevalence and examines the demographics, disability and work status, and other characteristics of the extremely low-income households most impacted by the national shortage of affordable and available rental homes.
Read the most recent edition of The Gap.
Who are the lowest income renters?
Of the 46 million renter households in the United States, approximately 11 million have extremely low incomes – that is almost 1 in every 4 renters have incomes at or below either the federal poverty guideline or 30% of the area median income (AMI), whichever amount is higher.
About half of renter householders with extremely low incomes are seniors or householders with disabilities. Around another 40% are in the labor force, in school, or single-adult caregivers of school-aged children or family members with disabilities. Of those in the labor force, about 40% usually work 40 or more hours per week.
The shortage of affordable and available rental homes disproportionately affects Black, Latino, and Indigenous households, as these households are both more likely to be renters and to have extremely low incomes. Black households are three times more likely than white households to be extremely low-income renters. Native Hawaiian or Pacific Islander, American Indian or Alaskan Native (AIAN), and Latino households are more than twice as likely to be extremely low-income renters than their white peers.
There is a severe shortage of affordable housing for the lowest-income renters
The U.S. has a shortage of approximately 7 million rental homes affordable and available to renters with extremely low incomes. Put differently, just 35 affordable and available rental homes exist for every 100 extremely low-income renter households nationally and every state and major metropolitan area in the U.S. has a shortage of rental homes affordable and available to these renters. The shortage is pervasive and exists in every state and all 50 of the largest metropolitan areas.
The pervasive shortage of housing affordable to the lowest-income renters is the result of limitations of the private market and inadequate public policy. The private market, absent subsidy, cannot produce or maintain an adequate supply of housing at rents that extremely low-income renters can afford. At the same time, affordable housing subsidy programs are chronically underfunded, reaching only a fraction of eligible renters.
The shortage of affordable housing results in cost-burdens and housing instability for millions of renters
The lack of affordable and available rental housing means many renters spend more than they can afford for housing. A household is cost-burdened when it spends more than 30% of its income on rent and utilities and severely cost-burdened when it spends more than 50% of its income on these expenses. Cost-burdened renters, especially those with the lowest incomes, are typically forced to cut back on other basic expenses like food, transportation, and health care in order to make rent. Housing cost burdens, as a result, can negatively impact many dimensions of family wellbeing beyond housing stability.
How to address the shortage of affordable and available housing for low-income renters
The shortage of affordable housing for the lowest-income renters documented in The Gap is systemic and rooted in limitations of the private market. What extremely low-income renters can afford to pay for rent does not cover the development and operating costs of new housing, and it often is not sufficient to provide an incentive for landlords to maintain older, lower-cost housing. The result is that the private market, on its own, fails to provide an adequate supply of affordable housing for the lowest-income renters in nearly every community. Public subsidies are needed to produce new affordable housing, preserve existing affordable housing, or subsidize the difference between what the lowest-income renters can afford to pay and market rents. Yet Congress chronically underfunds affordable housing programs.
Congress must demonstrate a bipartisan commitment to addressing the housing crisis by expanding investments in deeply targeted housing programs. For millions of the lowest-income renters, these investments will keep a roof over their heads. Greater investments in resources like the national Housing Trust Fund and public housing would go a long way to preserve and expand the supply of deeply affordable housing, while increases in Housing Choice Vouchers, for example, would help reduce the gap between incomes and market rents. Congress should also ensure adequate staffing at the agencies responsible for the efficient administration of our housing assistance programs.
For more information about policy solutions, please see The Gap.