HUD Archives: News Releases

NEW HUD REPORT SHOWS GROWING SHORTAGE OF AFFORDABLE HOUSING

The Widening Gap: New Findings on Housing Affordability in America

NOTE: Definitions for 30% of median income in many metro areas are listed at http://www.huduser.org/datasets/il/fmr99rev/index.html
Click on a state on the map and you get a list of metro areas in the state. The first full column - L30 30% of median - lists the 30% figure by family size from 1 to 8 people.

WASHINGTON - The number of houses and apartments that families with low-wage incomes can afford to rent is shrinking, burdening more families with high housing costs and threatening many with homelessness, according to a Department of Housing and Urban Development report issued today.

"The sad truth is that more and more people working at low-wage jobs, as well older Americans living on fixed incomes, are being priced out of the housing market as rents rise," said HUD Secretary Andrew Cuomo.

The new report - called The Widening Gap: New Findings on Housing Affordability in America - has four main findings, based primarily on new data from the U.S. Census Bureau's latest American Housing Survey:

• Despite a period of robust economic expansion, the housing stock affordable to struggling families continues to shrink. The number of such affordable rental units decreased by 372,000 units - a 5 percent drop - from 1991 to 1997. Struggling families are defined as those with incomes at or below 30 percent of the area median.
• Rents are rising at twice the rate of general inflation. According to U.S. Bureau of Labor Statistics data, in 1997 rents increased 3.1 percent while the overall Consumer Price Index (CPI) increased by only 1.6 percent. In 1998, rents increased 3.4 percent while the overall CPI increased 1.7 percent.
• As the affordable housing stock shrinks, the number of renters at or below 30 percent of median income continues to grow. Between 1995 and 1997, the number of struggling renter households increased by 3 percent, from 8.61 million to 8.87 million - one of every four renter households in America.
• The gap between the number of struggling Americans and the number of rental units affordable to them is large and growing. In 1997 for every 100 households at or below 30 percent of median income, there were only 36 units both affordable and available for rent.

"The four findings in this report clearly demonstrate that the affordability gap in rental housing is at crisis levels and continues to worsen," the report says. "The continued widening of this gap can be attributed in large part to the lack of federal appropriations for new housing assistance."

Congress Members Barbara Lee of California and Bruce Vento of Minnesota joined Cuomo at a news conference on the new report and called for more federal funding for affordable housing.

The report says President Clinton's Fiscal Year 2000 budget that calls for HUD to issue 100,000 additional rental assistance vouchers is needed to stop the loss of affordable housing.

The figure for 30 percent or less of the area median income varies in different communities, but the national figure amounts to $12,900 a year for a family of three and $14,350 for a family of four. That's more than the $10,700 annual income of a person working full-time at the national minimum wage of $5.15 an hour.

In areas with high living costs, the 30 percent of median income figure is higher, putting affordable housing even further out of reach of low-wage families. For example, in the Washington, DC area the limits of 30 percent of median income are $21,250 for a family of three and $23,600 for a family of four. The latter figure is more than two people working full-time at the minimum wage would make in a year. Localized figures for 30 percent of median income are available on the web (see note at top of release).

After four years when Congress did not provide funds for HUD to issue new rental assistance vouchers, Congress provided HUD with 50,000 new vouchers for the current fiscal year. HUD now provides housing assistance through Section 8 rental assistance to 3 million households and subsidizes public housing units for another 1.3 million households - for a total of 4.3 million.

In the past, Congress has responded to findings of serious housing affordability shortfalls by providing new rental assistance. For instance, the period between 1985 and 1987 saw a decline in the number of families in need of affordable housing. This period saw the number of rental assistance vouchers issued by HUD grow by 80,000 to 100,000 additional families each year. In the 1970s Congress often provided vouchers for hundreds of thousands of new families each year.

COMMENTS ON HUD's REPORT ON THE AFFORDABLE HOUSING SHORTGAGE

Senator Paul D. Wellstone (MN): "Although our country is at peak economic performance, millions of working families and the working poor find themselves falling farther and farther behind. We cannot continue to ignore their needs during this time of prosperity. If families are to move out of poverty and toward self-sufficiency they have to be able to find affordable housing. Now is the time to look at the needs of families and to make it our priority to improve the lives of the working poor."

Senator Jack Reed (RI): "Despite the country's economic prosperity, we are not doing enough to help working families obtain decent, safe and affordable rental housing. We must address this shameful situation and provide more housing vouchers for the elderly and the working poor and encourage the building of new affordable housing units."

Congressman Patrick Kennedy (RI): "The availability of low-income housing for our nation's less fortunate is at a deplorably low level. Considering this situation, these cuts by the Republican Congress are irresponsible at best, and at worst, malicious."

Congressman Bruce Vento (MN): "Congress has a serious responsibility to meet housing needs. Safe, affordable housing shouldn't be a luxury - it's the foundation of the American dream. These appropriation bills aren't structurally or socially sound. I commend Secretary Cuomo for leading the effort to restore fairness to these funding levels."

Congresswoman Nancy Pelosi (CA): "The nation is in the midst of an affordable housing crisis. Millions of parents must choose between having a roof over their family's heads or putting food on the table. That is a choice no parent should have to make."

Congressman Jim McDermott (WA): "We are rapidly approaching a housing crisis in this country. In Seattle, the city I represent, affordable housing is scarce. While the disparity between family incomes and the increasing cost of housing is growing at an alarming rate, Congress has failed to act. It is critical that the Administration receive the 100,000 vouchers requested, our working families depend on it."

Content Archived: January 20, 2009