The Darwinian Struggle to Find Affordable Housing

Does the prospect of finding “affordable housing” these days seem about as likely to you as winning the lottery? Then the findings of a new Harvard study on the state of the nation’s rental housing market will come as no surprise.

Stagnating incomes for low- and moderate-income workers, a dwindling stock of affordable housing, the collapse of the housing market, high unemployment, and other effects of the Great Recession are among the factors that have led to a sharp increase in the percentage of Americans spending more than half of their income on housing, according to “America’s Rental Housing: Meeting Challenges, Building on Opportunities.”

The study found that 26.1 percent of households living in rental properties paid more than 50 percent of their pretax income on rent and utilities in 2009, which marked a 6.4 percent increase over the rate of 19.7 percent in 2000. In contrast, over the 10-year period from 1960 to 1970, the rate only increased by 2.1 percent, from 11.9 percent to 14 percent. Typically, housing is considered “affordable” when a household spends 30 percent or less of its combined income on housing.

Given the demographics of the renting population, these “severe burdens” are falling disproportionately on minority households. As the study finds:

Renters are ethnically and racially diverse, with minorities accounting for 89 percent of the more than 4.0 million growth in their numbers from 2000 to 2010. Hispanics contributed 42 percent, and blacks 25 percent, of this increase. Over the decade, the minority share of renters thus rose from 39 percent to 45 percent—more than twice the minority share of owners.

Overall 32.6 percent of U.S. households lived in a rental property in 2009. The rate for White households was 25.2 percent, while it was 53.6 percent for Blacks, 51.6 percent for Hispanics and 41 percent for Asian/other.

The lack of affordable housing has long been a challenge for lower-income Americans. And over the last decade, it has only gotten worse. According to the study:

In combination, the shrinking affordable stock, falling incomes, and increased competition from higher-income renters have widened the gap between the number of very low-income renters and the number of affordable, adequate, and available units. In 2003, 16.3 million very low-income renters competed for 12.0 million affordable and adequate rentals that were not occupied by higher-income households. By 2009, the number of these renters hit 18.0 million while the number of affordable, adequate, and available units dipped to 11.6 million, pushing the supply gap to 6.4 million units (Figure 4).

Affordable Housing Supply Gap

The study concludes with a discussion of the policies addressing the affordable housing crisis, and notes examples of small but effective tools such as the Family Self-Sufficiency Program. But the scope of the problem, the study concludes, requires policies that go beyond the status quo and will demand the full cooperation of public, private, and non-profit organizations.

To learn more about federal policy on low-income housing, visit The National Low Income Housing Coalition.