The Joint Center for Housing Studies of Harvard University (JCHS) released the State of the Nation’s Housing Report on June 24. The report’s authors found a continued shortage of affordable housing supply particularly for the lowest-income households and an increase in homelessness after years of decline, especially in certain areas of the country.
The researchers found the number of completed rental homes is near a 30-year high of 360,000 completed units, and construction began on 392,000 new homes in 2017. Despite overall increases in supply, however, the majority of these new homes are to serve higher-income households; low-rent housing continues to decline in metropolitan areas. The stock of homes renting for less than $800 per month fell by 1 million from 2016 to 2017, a loss of almost 5%. New construction is not making up for this decline, as only 4% of unsubsidized multifamily buildings completed in the first quarter of 2018 had rents less than $850. Low-rent homes are also increasingly older homes, which puts residents at greater risk of displacement if the homes are demolished to make way for new construction of high-end rentals.
The report cites NLIHC’s findings that there are only 37 affordable and available units for every 100 extremely low-income renter households with incomes less than the poverty rate or 30% of the area median income (AMI). For very low-income renter households, who earn less than 50% of AMI, there are 58 affordable and available units for every 100 renter households. Using data from the National Housing Preservation Database (a product of NLIHC and the Public and Affordable Housing Research Corporation), the JCHS researchers estimate that affordability restrictions on 1.2 million rental homes could expire by 2029.
The share of housing cost-burdened households paying more than 30% of their incomes on their housing has declined for the seventh straight year to 31.5%, but this decline is largely driven by homeowners. Among homeowners, the share of cost-burdened households declined by 8% from 2010-2017. Although the number of cost-burdened renters also slightly decreased, 47.4% of renter households are still cost-burdened, and nearly 83% of renters earning less than $15,000 a year were housing cost-burdened in 2017. Cost-burden rates were significantly higher for minority households than white households for both renters and homeowners. Compared to households able to afford their homes, cost-burdened households spent 13% less on food, 40% less on healthcare, and 23% less on transportation.
Despite significant reductions in homelessness over the past decade, homelessness increased by .3% to 552,830 in 2018. There was also a 2.3% increase in unsheltered homeless people, especially in high-cost western states. Unsheltered homelessness increased by 25% from 2014 to 2018 in California.
The report’s authors found that the number of renter households declined to 35.6% of all households in 2018, with decreases in the largest and most expensive metro areas. They found an increase, however, in older and higher-income renting households, while the number of renter households making less than $15,000 declined by 451,000. Rents rose 3.6% in 2018, with rent increases for both higher and lower-quality homes. This is partly due to low vacancy rates, which fell to 6.9%. Vacancy rates are lowest in the West and Northeast.
The authors also review the state of homeownership in the U.S. The homeownership rate increased to 64.4% of households, a departure from the 2007-2016 trends of renter household growth and homeowner household declines. The upturn in homeownership rates is present across all racial groups, but JCHS researchers found that the white-Hispanic homeownership gap was unchanged, and the white-black homeownership gap continues to widen. Home prices rose 3.9% in real terms, increasing the number of areas facing severe affordability challenges and making it harder for lower-income households, which are disproportionately black and Hispanic, to afford to buy a home.
The State of the Nation’s Housing Report is at: https://bit.ly/2xd12Qc