Higher Housing Cost Burdens Increase Likelihood of Material Hardship

A recent article published by Housing Policy Debate, “Housing Cost Burden, Material Hardship, and Well-Being, finds that a household’s likelihood of experiencing food insecurity, difficulty paying bills, and difficulty affording medical care increases as their share of income spent on housing increases. Additional spending on housing above 50% of income, however, does not further increase the likelihood of these hardships, indicating that households spending half of their incomes on housing are already in precarious situations with significant hardship.

The researchers used data from the 2008 panel of the Survey of Income and Program Participation (SIPP), which included more than 42,000 households. The core survey was repeated every four months from 2008 to 2013 and covered subjects such as demographic characteristics, employment, income, and whether households received public assistance. The authors analyzed survey results to determine whether the share of income a household spent on housing affected the likelihood of experiencing material hardship, their housing satisfaction, housing problems, and neighborhood conditions.

To test the idea that households with higher housing cost burdens make trade-offs to obtain better housing quality or better neighborhood conditions, the authors analyzed the relationship between cost burden and housing satisfaction, housing problems, and neighborhood conditions. They found no statistically significant relationship between housing cost burden and home satisfaction, indicating households are not taking-on higher housing cost burdens to live in subjectively better housing. There was no significant relationship between housing cost-burden and general satisfaction with the neighborhood or satisfaction with neighborhood safety. Higher cost-burdens were associated with less satisfaction with neighborhood public services, however. While they find little evidence that households trade higher housing cost burdens for improved neighborhood conditions, other potentially relevant neighborhood characteristics—such as the poverty rate or crime rate—are not reflected in the data.

Read the full paper at: https://bit.ly/3rDIPVH