The Gap: A Shortage of Affordable Rental Homes

National Low Income Housing Coalition

About the Gap Report

Each year, the National Low Income Housing Coalition (NLIHC) measures the availability of rental housing affordable to extremely low-income households and other income groups. Based on the American Community Survey Public Use Microdata Sample (ACS PUMS), The Gap presents data on the affordable housing supply and housing cost burdens at the national, state, and metropolitan levels. The report also examines the demographics, disability and work status, and other characteristics of extremely low-income households most impacted by the national shortage of affordable and available rental homes.

Who are the Lowest Income Renters?

Of the 43.3 million renter households in the U.S., 11 million have extremely low incomes at or below the poverty level or 30% of the area median income (AMI), whichever is higher. Forty-eight percent of extremely low-income renter households are seniors or a householder with a disability. Another 39% are in the labor force. Of those in the labor force, 43% usually work forty or more hours per week.

Figure 8: Extremely Low Income Renter Households. 2% are single non-disabled non-elderly caregivers of a person with disability or young child. 3% are in school. 8% other. 22% are disabled. 26% are seniors. 39% are in the labor force. Of that 39%, 43% work over 40 hours per week. 34% work 20 to 39 hours per week. 10% work less than 20 hours per week. 12% are unemployed.
Note: Mutually exclusive categories applied in the following order: senior, disabled, in labor force, enrolled in school, single adult caregiver of a child under 7 or of a household member with a disability, and other. Senior means householder or householder's spouse (if applicable) is at least 62 years of age. Disabled means householder and householder's spouse (if applicable) are younger than 62 and at least one of them has a disability. Unemployed means houeholder and householeder's spouse (if applicable) are younger than 62 and both are unemployed. Working hours is usual number of hours worked by householder and householder's spouse (if applicable). Enrolled in school means householder and houesholder's spouse (if applicable) are enrolled in school. Fifteen percent of extremely low-income renter households include a single adult caregiver, more than half of whom usually work more than 20 hour per week and 2% of whom are in school. Source: 2017 ACS PUMS.

Black, Native American, and Hispanic households are more likely than white households to be extremely low-income renters. This disparity is the result of higher homeownership rates and higher incomes among white households. Racial disparities also exist among renters alone. Thirty-eight percent of American Indian or Alaska Native renters, 35% of black renters, and 28% of Hispanic renters have extremely low-incomes, compared to 22% of non-Hispanic white renters.

There is a Severe Shortage of Affordable Housing for the Lowest Income Renters

The U.S. has a shortage of seven million rental homes affordable and available to extremely low-income renters. Only 37 affordable and available rental homes exist for every 100 extremely low-income renter households. Extremely low-income renters face a shortage in every state and major metropolitan area, including the District of Columbia. Among states, the supply of affordable and available rental homes ranges from only 19 for every 100 extremely low-income renter households in Nevada to 66 in Wyoming. Among the 50 largest metropolitan areas in the U.S, the supply ranges from 13 affordable and available rental homes for every 100 extremely low-income renter households in Orlando, FL to 51 in Pittsburgh, PA.

The Shortage of Affordable Housing Results in Cost-Burdens and Housing Instability for Millions of Renters

Cost-burdens are a direct result of the shortage of affordable and available rental homes and low wages. A household is cost-burdened when it spends more than 30% of its income on rent and utilities, and severely cost-burdened when it spends more than 50%. Seventy-one percent of extremely low-income renter households are severely cost-burdened. They account for nearly 73% of all severely cost-burdened renter households in the U.S.

Figure 5: Renter Households with Cost Burden by Income Group, 2017
  Extremely Low Income Very Low Income Low Income Middle Income Above Median Income
Cost Burden 9,425,712 5,064,746 4,080,235 892,567 714,825
Severe Cost Burden 7,761,502 2,115,593 684,343 88,416 54,115
Source: NLIHC tabluations of 2017 ACS PUMS data

Severely housing cost-burdened and poor renters make significant sacrifices to pay for housing. Poor families with children who are severely cost burdened spend 46%, or $354 per month, less on food, transportation, and healthcare than poor families who are not housing cost-burdened (Joint Center for Housing Studies, 2018). Even with these sacrifices, severe housing cost burdens make it difficult for poor renters to keep up with their rent. The 2013 American Housing Survey (AHS) indicates severely cost-burdened poor renters are more than twice as likely to fall behind on their rent, and be threatened with eviction, than poor renters with no cost burden.

What to Do?

A significant and sustained federal commitment to affordable housing programs that are targeted to meet the affordability needs of the lowest-income families is necessary. This commitment should include a large investment in the national Housing Trust Fund (HTF) and expansion of rental assistance like the Housing Choice Voucher (HCV) program. We must also protect the existing supply of affordable homes for the poorest renters through significant capital investments in public housing and adequate funding to preserve affordable housing subsidized by Project-Based Rental Assistance (PBRA) and the USDA’s Section 515 program.

Reforms to the federal tax code could also improve our nation’s ability to stably house the most financially vulnerable renters. A deeply income-targeted fully refundable renters’ tax credit for cost-burdened renters would help address the gap between housing costs and the incomes of the poorest renters.

The Case for Affordable Homes

Investing in affordable housing solutions, like the national HTF, the HCV program, public housing, and other deeply income-targeted programs is inextricably linked to an array of positive outcomes beyond housing. Affordable and stable housing helps improve cognitive development and academic achievement among low-income children, reduces the risk of poor health among children and their caregivers, and improves for children the chances of economic mobility later in life.