HUD Finds Affordable Housing Crisis Deepening

April 17, 2000

Despite America’s continued economic expansion, a new Department of Housing and Urban Development (HUD) report to Congress issued on March 27 finds that a record 5.4 million low-income families need housing assistance due to a shrinking number of affordable rental units.

The HUD report to Congress documents the need for a series of initiatives that President Clinton has requested in his proposed 2001 budget to increase the supply of affordable housing, including: $690 million for 120,000 new rental assistance vouchers; $1.2 billion in funding for homeless grants; and $1.65 billion for HOME program grants.

The report, Rental Housing Assistance- The Worsening Crisis, lists six major findings:

• At least 5.4 million unassisted very-low-income families pay over half their income for housing or live in severely distressed housing, an increase of 12% since the economic recovery began in 1991.

• Families with worst case housing needs are working harder than ever. Between 1991 and 1997, despite a robust economic recovery, worst case housing needs increased more than three times as quickly for households with full time earners than for all other very low-income renters.

• The housing stock affordable to the lowest income Americans continues to shrink, with rental units affordable to families with incomes below 30% of area median income down by 5 percent between 1991 and 1997, a decline of over 370,000 units.

• Between 1991 and 1997, worst case needs became more concentrated among households with incomes below 30% of the area median income; and 77% of those with worst case needs - 4.2 million - have extremely low income.

• Worst case housing needs among minority household increased dramatically during the 1990s, while needs of non-Hispanic whites were stable. Increases were particularly high among Hispanic households - up 45% between 1991 and 1997 - and working minority families with children.

• Both very low renters and extremely low renters remain more likely to have worst case problems in the suburbs than elsewhere. Whereas nationally 37% of very-low- income renters have worst case problems, over 40% of very low income renters and 69% of extremely-low income renters living in the suburbs have worst case housing needs.

Very-low-income renter households with severe rent burdens rose by 500,000 families between 1995 and 1997. In 1997, 6.4 million very-low-income renters had a severe rent burden, a sharp increase from 5.9 million in 1995.

On a national average, extremely low incomes are defined as less than $13,590 for a family of four and $10,872 for a family of two. Almost 70 percent of such households that are not receiving HUD assistance pay more than half their income for rent or live in severely inadequate housing.

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