Report: Renters living at or below the poverty line face a ‘severe shortage of housing’

When real estate prices began increasing at a historic rate a few years ago, contractors and other stakeholders moved quickly to increase housing availability—and they did, but only for those who could afford it. The number of available affordable housing units for those living at or below the poverty line, meanwhile, has decreased, according to a new report from the National Low Income Housing Coalition.

“As this year’s Gap report makes clear, extremely low-income renters are facing a staggering shortage of affordable and available homes,” said Diane Yentel, president and CEO of the housing organization about the annual report, “The Gap: A Shortage of Affordable Homes, 2023.” “In the wake of the pandemic, federal housing investments are more critical than ever for sustaining our communities and helping low-income people thrive.”

Between 2021 and 2022, rental costs spiked 22% nationally, according to the report. And as prices went up, the number of housing units that low income renters could afford declined by “more than one million units,” the report says. Simultaneously, rental vacancy rates reached a four-decade low.

The resulting housing crisis has forced many first-time home buyers to postpone their plans, and a “severe shortage of housing” for renters living at or below the poverty line, classified in the report as “extremely low-income.” Currently, there’s an estimated 7 million affordable rental homes nationally for 11 million extremely low income households. And of those, “3.3 million are occupied by higher-income households, leaving only 3.7 million rental homes that are both affordable and available for extremely low-income renters,” the report says. Households are considered ‘housing cost-burdened’ if they spend greater than 30% of their income on rent and utilities. Of those households, 35% work in the labor force; 30% are seniors, and 18% are disabled.

Minorities are disproportionately impacted: 57% of Black Americans are renters, and 19% live at or below the poverty line, along with 14% of Latinos, 17% of Native Americans or Alaska Natives, 9% of Asian Americans and 6% of white Americans.

Out of every state and the nation’s 50 largest metro areas, none have an adequate amount of affordable housing for the lowest-income renters, based on the report’s criteria. Nevada has the lowest ratio, at 17 available and affordable houses “for every 100 extremely low-income renter households.” Other states with severe shortages include Oregon, Florida, California, Arizona, and Texas. 

Metro areas with the greatest shortage include: Las Vegas, Nev. (where there are 14 affordable and available rental homes for every 100 extremely low-income household), Orlando, Fla., Dallas, Tx., Austin, Tx, Houston, Tx., San Diego, Calif., and Phoenix, Ariz.

South Dakota has the highest ratio of all states, at 58 homes per 100 households, followed by Rhode Island (53), Mississippi (51), West Virginia (50), and North Dakota (50). Metro areas with the highest ratios include: Providence, R.I. (48 homes for every 100 extremely low-income household), Pittsburgh, Pa., Boston, Mass., Kansas City, Mo., Cincinnati, Ohio, and Cleveland, Ohio.

The ratios published in the report are notably underestimated, as the Census Bureau’s annual American Community Survey, which the report is based on, doesn’t capture the number of people experiencing homelessness. It’s especially difficult for those living paycheck to paycheck to find suitable housing because they must compete with higher income households that are vying for the same units.

The report notes the federal government can make a big impact on the crisis by actions like expanding the affordable housing voucher program, and by increasing investments into the nation’s affordable housing stock. Local governments also have a key role to play “in improving access to affordable housing, including reforming zoning and reducing other land-use restrictions to bolster affordable housing development. These local reforms are necessary, but insufficient without federal resources for eliminating the shortage of affordable rental housing for the nation’s lowest-income renters,” the report says. “Only sustained and significant federal investments in rental housing can ensure that the lowest-income renters, who are disproportionately people of color, have affordable homes.”

To view the full report, visit the National Low Income Housing Coalition’s website.