HUD reports “worst case housing needs” jump more than 20 percent

The impact of our struggling economy on the housing market isn’t a surprise to anyone. The evidence of this can be seen from the abundance of foreclosure signs filling our neighbors’ front yards.  Therefore, the findings from a recent U.S. Department of Housing and Urban Development (HUD) report that “worst case housing needs” have grown more than 20 percent might not be much of a shock.

According to HUD’s Worst Case Housing Needs 2009: Report to Congress, the term “worst case needs” is defined as very low-income renters with incomes below 50 percent of the Area Median Income; who do not receive government housing assistance; and who either paid more than one-half of their income for rent, lived in severely inadequate conditions, or faced both of these challenges. The number of people falling into this category has risen from 5.91 million in 2007 to 7.10 million in 2009.  This is the largest increase for a two-year period since HUD began reporting this segment of the rental market in 1985.

The report found a direct link between the increased “worst case needs” and the recent recession and related joblessness. It also found that:

  • Every racial/ethnic group experienced increases in worst case housing needs during 2007-2009 with Hispanic households having the largest increase in incidence (8 percentage points).
  • Worst case needs among renters with disabilities increased from 37.5 percent to 40.7 percent (of all very low-income renters with disabilities).
  • The availability of affordable rental housing varies across regions of the country with supply most scarce in the West, where only 53 units available per 100 very low-income renter households, compared with 65 in the South, 66 in the Northeast and 87 in the Midwest. 

What caused such a dramatic increase?

Although the home ownership crisis and economic recession played a major part, and other factors contributed, the report’s summary indicates that most of the 2007 to 2009 increase can be linked to three factors:

1)      Renter income losses – An estimated 35 percent of the increase is the result of a decline in renters’ incomes, due to the incidence of unemployment.

2)      Rental assistance gap – About 19 percent is due to the lack of rental assistance for very low-income renters, in proportion to their rising number.

3)      Competition for affordable rental units – The biggest factor, at about 41 percent, is related to the increased competition for a limited number of affordable units that low-income families are facing from higher income families.

How is the Obama Administration responding?

HUD reports that the Obama Administration “has been taking strong action to respond to the decline in family incomes and increase in need for affordable housing” through three initiatives:

  • Recovery Act – Nearly 341,000 units of affordable housing are rehabilitated or constructed through the Recovery Act’s Tax Credit Assistance Program and Public Housing Capital Fund.  In addition, the Recovery Act guaranteed rental subsidy to approximately 1.2 million units of affordable housing through HUD’s Project-based Rental Assistance ProgramMeanwhile, the Recovery Act’s Homeless Prevention and Rapid Re-housing Program prevented or ended homelessness for more than 750,000 persons.
  • Opening Doors – In June, the U.S. Interagency Council on Homelessness (USICH) unveiled Opening Doors, the nation’s first comprehensive strategy to prevent and end homelessness. The plan puts the country on a path to end veteran and chronic homelessness by 2015; and to ending homelessness among children, family, and youth by 2020. 
  • National Housing Trust Fund – The Obama Administration is seeking $1 billion to invest in thousands of new affordable housing units targeted to the nation’s lowest income families.

We at the Coalition find this report quite sobering, especially when coupled with the findings reported in our May 2010 blog post, titled Rental housing “out of reach” for many.

The findings make us especially appreciative of our ability to help qualified clients through our community housing programs. Otherwise, they might be a statistic in the “worst case housing needs” population.

To read a summary of Worst Case Needs: A Report to Congress, click here.

To read the entire report, click here.