Harvard report shows urgent need for low-income rental housing
The nationwide demand for the kind of affordable housing created by LISC is becoming critical. According to a Harvard study released last week, the demand for affordable rental housing is now more than twice the supply. Since 2008, more than 4.4 million homeowners facing foreclosure have turned to the rental market, increasing demand for low-income housing. Meanwhile, government budget cuts have led to a shrinkage in the supply of subsidized housing. Eric Belsky, managing director of the Harvard Joint Center for Housing Studies, told the Wall Street Journal, "It's pretty dispiriting. When you're spending that much on housing, there are all these things you're not spending money on, in grocery stores, on clothing, on entertainment, on health care."
The excerpt below is from:
"The State of the Nation’s Housing"
by Harvard Joint Center for Housing Studies
The State of the Nation’s Housing
The State of the Nation’s Housing report has been released annually by Harvard University’s Joint Center for Housing Studies since 1988. Now in its 25th year, it continues to serve as an essential resource for both public policy makers and private decision makers in the housing industry. This year’s report provides a current assessment of the state of the housing market and the foreclosure crisis; the economic and demographic trends driving housing demand; the state of mortgage finance; and ongoing housing affordability challenges.
The long-awaited housing recovery finally took hold in 2012, heralded by rising home prices and further rental market tightening. While still at historically low levels, housing construction also turned the corner, giving the economy a much-needed boost. But even as the most glaring problems recede, millions of homeowners are delinquent on their mortgages or owe more than their homes are worth. Worse still, the number of households with severe housing cost burdens has set a new record.
Among the findings:
No Recovery in Housing Cost Burdens
- In 2011 42.3 million households, or 37 percent, faced housing cost burdens, paying more than 30 percent of pre-tax income on housing costs, including 20.6 million households (17.9 percent) with severe cost burdens, paying more than 50 percent of pre-tax income for housing.
- Between 2001 and 2011, the number of severely burdened households increased by 6.7 million, or 49 percent. Since the beginning of the recession in 2007, the increase has been 2.6 million.
- Between 2007 and 2011, the number of severely burdened renters soared by 2.5 million and now account for 27.6 percent of the total number of cost-burdened households.
- Nearly seven out of ten households with annual incomes of less than $15,000 (roughly equivalent to year-round employment at the minimum wage) pay more than half of their income for housing costs.
- In California, New York, and New Jersey, more than 22 percent of households pay more than 50 percent of pre-tax income for housing, as median home values and rents in these states are among the highest in the country.
- Severely cost burdened low-income families spend about two-thirds as much on food, half as much on clothing, one-fifth as much on health care, and half as much on pensions and retirement as similar families living in housing they can afford.
Affordable Housing Gap Grows as Rising Demand Overwhelms Supply
- In 2011, there were 12.1 million extremely low-income renters, an increase of 2.5 million since 2007. Meanwhile, as of 2011 there were 6.8 million housing units affordable to extremely low-income renters in 2011, 135,000 units fewer than in 2007.
- Between 2001 and 2011 650,000 housing units renting for $400 per month – affordable to households earning a fulltime minimum wage – were permanently removed from the housing stock, a loss of 12.8 percent of the 2001 low-cost inventory.
