Diminishing Affordability – Inescapable, a report from the Multifamily Research Center at Freddie Mac, finds the percentage of multifamily rental units affordable to very low-income (VLI) households, those with incomes less than half of their area median income, fell from 56% in 2010 to 39% in 2017. This represents a loss of 2.4 million affordable rental homes. Rental housing is considered affordable if a household does not have to spend more than 30% of its income for rent and utilities. Metropolitan areas with the greatest population growth experienced a greater loss in the share of rental homes affordable to VLI households, but even slow-growing metro areas experienced losses.
Eighty-six percent of metropolitan areas experienced a reduction in the percentage of multifamily rental units affordable to VLI households between 2010 and 2017. The report points to rent-price growth outpacing income growth as the largest driver of this trend. Throughout this period, the median rent for all multifamily units increased 27% while median income increased by only 6%.
Affordability declined in metropolitan regions with both slow- and fast-growing populations, although fast-growing metros lost affordable housing at a faster rate. In Austin, TX, the fastest growing metro area, the number of all multifamily rental units increased by 20%, while the number of multifamily units affordable to VLI households decreased by 43%. The largest drop in the percentage of multifamily rental units affordable to VLI households occurred in Portland, OR, with 70% of multifamily units affordable to VLI households in 2010 decreasing to 23% in 2017.
Diminishing Affordability – Inescapable is available at: https://bit.ly/2LR44Cl