About the Gap Report
Each year, the National Low Income Housing Coalition (NLIHC) measures the availability of rental housing affordable to extremely low-income households and other income groups. Based on the American Community Survey Public Use Microdata Sample (ACS PUMS), The Gap presents data on the affordable housing supply and housing cost burdens at the national, state, and metropolitan levels. The report also examines the demographics, disability and work status, and other characteristics of those extremely low-income households most impacted by the national shortage of affordable and available rental homes.
Who Are the Lowest-Income Renters?
Of the 44 million renter households in the U.S., 11 million have extremely low incomes—that is, incomes at or below the poverty level or 30% of the area median income (AMI), whichever is higher. Forty-six percent of extremely low-income renter households are seniors or householders with disabilities. Another 44% are in the labor force, in school, or are single-adult caregivers. Of those in the labor force, 42% usually work 40 or more hours per week.
Black, American Indian and Alaska Native, and Latino households are more likely than white households to be extremely low-income renters. While 6% of white households are extremely low-income renters, 20% of Black households, 18% of American Indian and Alaska Native households, and 15% of Latino households are extremely low-income renters. This disparity is the result of higher homeownership rates and higher incomes among white households. Racial disparities also exist among renters. Thirty-seven percent of American Indian and Alaska Native renters, 34% of Black renters, and 28% of Latino renters have extremely low incomes, compared to 21% of non-Latino white renters.
There is a Severe Shortage of Affordable Housing for the Lowest-Income Renters
The U.S. has a shortage of 7 million rental homes affordable and available to extremely low-income renters. Only 36 affordable and available rental homes exist for every 100 extremely low-income renter households. Extremely low-income renters face a shortage in every state and major metropolitan area, including the District of Columbia. Among states, the supply of affordable and available rental homes ranges from only 18 for every 100 extremely low-income renter households in Nevada to 61 in West Virginia. Among the 50 largest metropolitan areas in the U.S, the supply ranges from 13 affordable and available rental homes for every 100 extremely low-income renter households in Las Vegas, NV, to 50 in Providence, RI.
The Shortage of Affordable Housing Results in Cost Burdens and Housing Instability for Millions of Renters
Cost burdens are a direct result of the shortage of affordable and available rental homes and of low wages. 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 rent and utilities. Seventy-one percent of extremely low-income renter households are severely cost-burdened. They account for 72% of all severely cost-burdened renter households in the U.S.
The Fallout from the COVID-19 Crisis
Severely housing cost-burdened and poor renters make significant sacrifices to pay for housing. A severely housing cost-burdened extremely low-income family of four with a monthly income of $2,050, for example, has $755 remaining for all other non-housing expenses when renting the average two-bedroom apartment at a fair market rent of $1,295 per month. Such a family could not afford the $863 per month estimated by the U.S. Department of Agriculture (USDA) in its Thrifty Food Plan as being necessary for covering the costs of food for a family of two adults and two children, let alone the costs of other necessities like childcare, healthcare, and transportation.
Millions of low-income renters were struggling to afford their rent before the pandemic and the economic impacts of COVID-19 have exacerbated the problem even further as low-wage workers lost income. While Treasury Emergency Rental Assistance (ERA) funds have provided critical support for many of these renters, many more are still in need of assistance.
Over five and a half million renter households were still behind on rent in March 2022. Forty-one percent of renters behind on rent in March 2022 reported having applied for emergency rental assistance through state or local programs, including ERA-funded programs. Over half of these applicants were still waiting for a response. Of renters who reported receiving rental assistance by March 2022, 79% were caught up on rent. The remaining 21% of renters who had received rental assistance were still behind on rent and will likely need longer-term assistance.
Although temporary and imperfect, eviction moratoriums and ERA programs have kept millions of already disadvantaged renters housed and likely helped save lives during the pandemic. ERA programs will continue to support some renters in the short term. However, when the economic impacts of the pandemic subside and emergency rental assistance programs conclude, the underlying shortage of affordable housing for the lowest-income renters will remain.
Fixing the chronic shortage of affordable and available housing for the lowest-income renters requires long-term commitments. A significant and sustained federal commitment to affordable housing programs that are targeted to meet the affordability needs of the lowest-income families is necessary.
Permanently addressing the shortage of affordable and available housing for the lowest-income households in America requires increasing the supply of affordable housing and preserving the existing affordable housing stock. One key tool in that effort is the national Housing Trust Fund (HTF), an annual block grant to states for the creation, preservation, or rehabilitation of rental housing for the lowest-income renters. The distribution of HTF funds to each state and the District of Columbia is determined by the shortage of rental housing affordable and available to extremely low-income and very low-income renters in a given locality and the extent to which these renters are severely housing cost-burdened
The Housing Choice Voucher (HCV) program should be expanded so that every income-eligible household can receive assistance. Due to chronic underfunding by Congress, only one in four households in need currently receives housing assistance. A federal ban on source-of-income discrimination is also needed, since the refusal by some landlords and property owners to accept vouchers and other forms of rental assistance makes the process of finding adequate housing much more difficult for many renters.
The public housing stock is also an important component of the affordable housing supply for the lowest-income renters. However, it faces a significant backlog of capital repair needs totaling more than $70 billion, which threatens the quality and continued operation of these homes. At a minimum, Congress should increase annual appropriations for public housing. Congress should also consider a major one-time investment for preservation to address the backlog in capital repair needs.
Given the present shortage of affordable and available homes, many low-income households spend an unsustainable share of their incomes on housing and are just one unexpected financial crisis away from housing instability. The implementation of hundreds of state and local emergency rental assistance programs offers valuable lessons that could be used in efforts to create a permanent emergency assistance fund. Congress should draw on these lessons to create a permanent National Housing Stabilization Fund to provide emergency assistance to low-income households facing housing instability, eviction, or homelessness after an economic shock. Modest temporary assistance could help some households stay in their homes after a short-term job loss or unexpected expense, reducing the long-term negative impact of these events.