About The Gap: A Shortage of Affordable Rental Homes

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 43.7 million renter households in the U.S., nearly 11 million have extremely low incomes at or below the poverty level or 30% of the area median income (AMI), whichever is higher. Forty-six percent of extremely low-income renter households are seniors or a householder with a disability. Another 37% are in the labor force. Of those in the labor force, 43% usually work forty or more hours per week.

Figure 10: Extremely Low Income Renter Households. 3% are single non-disabled non-elderly caregivers of a person with disability or young child. 4% are in school. 10% other. 18% are disabled. 28% are seniors. 37% are in the labor force. Of that 37%, 43% work over 40 hours per week. 34% work 20 to 39 hours per week. 10% work less than 20 hours per week. 14% 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 household- er and householder’s spouse (if applicable) are younger than 62 and at least one of them has a disability. Working hours is usual number of hours worked by household- er and householder's spouse (if applicable). School means householder and householder'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 hours per week. Eleven percent of extremely low-in- come renter households are enrolled in school, 48% of whom usually work more than 20 hours per week. Source: 2018 ACS PUMS.

People of color are more likely to be extremely low-income renters. Twenty percent of Black households, 17% of American Indian or Alaska Native households, 15% of Hispanic households, and 10% of Asian households are extremely low-income renters. Only 6% of white non-Hispanic households are extremely low-income 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 36 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 18 for every 100 extremely low-income renter households in Nevada to 62 in West Virginia. Among the 50 largest metropolitan areas in the U.S, the supply ranges from 14 affordable and available rental homes for every 100 extremely low-income renter households in Las Vegas, NV, and Austin, TX, to 54 in Providence, RI.

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 72% of all severely cost-burdened renter households in the U.S.

Figure 5: Renter Households with Cost Burden by Income Group, 2018

Extremely Low Income Very Low Income Low Income Middle Income Above Median Income

Cost Burden 9,376,471 5,209,550 4,140,459 928,264 708,106

Severe Cost Burden 7,745,633 2,228,984 705,088 89,717 49,862

Source: NLIHC tabluations of 2018 ACS PUMS data

Figure 5: Renter Households with Cost Burden by Income Group, 2018
	Extremely Low Income	Very Low Income	Low Income	Middle Income	Above Median Income
Cost Burden	9,376,471	5,209,550	4,140,459	928,264	708,106
Severe Cost Burden	7,745,633	2,228,984	705,088	89,717	49,862

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 targeted to the affordability needs of the lowest-income families is necessary. This commitment should include a large investment in the national Housing Trust Fund (HTF), which is the most effective tool for producing homes affordable to extremely low-income households. Expanding rental assistance programs like the Housing Choice Voucher (HCV) program must be a significant component of any strategy to address the severe housing shortage, and introducing a ban on source-of-income discrimination against voucher holders would improve their effectiveness. 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. Several recent congressional proposals would dedicate resources to the substantial backlog of public housing repair needs and enable new construction of public housing.

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. Expanding and reforming the Low Income Housing Tax Credit (LIHTC) to better target the needs of extremely low-income households would also facilitate more construction.

Federal policy also needs to address the immediate needs of households suffering because of this severe shortage. A National Housing Stabilization Fund that provides direct, short-term assistance to low-income households facing eviction or homelessness could mitigate some grave harms.

Housing Justice

Stable, decent, accessible housing is a fundamental need. Housing provides shelter, security, privacy, and a place for sleep. It is an essential ingredient for many elements of individuals’ well-being – their health, control over their environment, and the ability to develop their emotional lives, plans, and connections to their community.

The shortage of affordable and available housing is created and perpetuated by a political and economic system that does not prioritize the needs of households with the lowest incomes. A private housing market driven by economic incentives will continue to fail to adequately serve that population, and we do not invest adequate public resources in rental housing programs. The way in which income and other resources are distributed in our society keeps a large number of people in poverty. The labor market continues to create low-wage work, and our political institutions do not sufficiently respond to the resulting financial needs of low-wage workers, leaving many to struggle to afford basic needs including housing. A just society is one in which the social, political, and economic system is fair and justifiable to all. We cannot justify a system that persistently creates deprivation when alternatives exist. Allowing the severe housing shortage to persist, then, is an injustice, and we owe it to our fellow citizens and neighbors to make significant investments in affordable housing.

Investing in affordable housing solutions, like the national HTF, the HCV program, public housing, and other deeply income-targeted programs is 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.