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Dimensions of the Affordable Housing Crisis

The following are select comments that Sheila Crowley of the National Low Income Housing Coalition made on May 3rd before the Congressional Subcommittee on Housing & Community Opportunity.

Housing policy can be unnecessarily complicated, but housing is quite straightforward. Everyone needs a basic, stable, safe, fair, and clean place to live and the capacity to pay for it. Some may need additional services to assure stability. That is the social minimum. In the absence of a national commitment to this standard, it is foolhardy to expect people to succeed as workers, students, parents, or citizens, all roles that depend on housing stability to be fulfilled well. Beyond the social minimum, people can make all manner of other housing decisions - where, what size, how much, what amenities, rent or own - and public policy should support those that serve a good public purpose. But without attending to the social minimum in housing, we undermine the potential to achieve other desired social objectives and erode the foundation of our housing system.

The Housing Wage

I would like to place in the record two reports by the National Low Income Housing Coalition that address housing unaffordability. The first is Out of Reach,[1] which documents the gap between income and housing costs in every jurisdiction in the country. We publish these data in the fall and these are from September 2000. This is the source of what has become a frequently cited refrain by housing advocates and public officials: "There is no jurisdiction in the country where a full time minimum wage worker can afford the fair market rent."
The National Low Income Housing Coalition has examined the 1999 American Housing Survey data about the housing concerns of low income people. Some of the findings include:

* 34 million households rented their housing in 1999, about one third of all households.

* 62% of the renter households were low income using the federal definition of incomes at or below 80% of the area median. 23% of all renter households are extremely low income or have incomes at or below 30% of the area median. In Sussex County, NJ, 30% of area median income is $22,022 annually.

* 32% of owner households are low income and 11% are extremely low income.

* 24% of all renter households (8.2 million) had severe housing problems, either housing costs at 50% of income or more or severely inadequate housing. Severe housing problems are primarily the experience of low income households; 68% of renter households with severe housing problems (mostly high cost burden) have extremely low incomes.

* 11% of all owner households (7.7 million) had severe housing problems, and 54% of these households are extremely low income. Of note is that 37% of owner households with severe housing problems are first time homebuyers.

The Rental Housing Shortage

One finding in this analysis is of particular importance to those who make housing policy decisions. We analyzed the shortage of rental housing units by income. Although these are national data and therefore cannot tell the story in any given community, they do give a glimpse of the overall scope. Of the 34 million renter households, 7.7 million have extremely low incomes (30% of the area median or less). In the aggregate, there are only 4.9 million units of rental housing that are affordable to these households, thus an absolute shortage of 2.8 million units. (Note that there is a range of incomes from 0 to 30% of area median in this group and not all units are affordable to all households in this range.) However, only 2.3 million of these units are actually occupied by households with incomes in this range. The rest are occupied by higher income households who do not have high housing cost burdens as a result. So overall, there is a shortage of 5.3 million units affordable for the poorest renter households...
Besides low wage workers, the population of extremely low income rental households includes elderly and disabled people whose only income is from SSI (Supplemental Security Income) or other fixed income sources. According to the Coalition for Citizens with Disabilities, about 1.4 million (35%) of the more than 4 million disabled SSI beneficiaries have severe housing cost burdens.[3]

The Meaning of the Affordable Housing Crisis for Families

The numbers are quite stark. You will learn about other analyses during this hearing with equally gloomy data. But the numbers fail to convey the meaning of housing unaffordability, especially for the very poor. We are all familiar with the stories of people who cannot afford to pay for all necessities and therefore have to make choices about paying the rent, keeping the heat on, and purchasing food or medicine. We also can understand the negative consequences for family life and child well-being when the adults in the household have to work two or more jobs to earn enough to sustain the family. Families also reduce housing costs by doubling up down with other families in crowded and stressful circumstances. Or they fall prey to unscrupulous landlords who may charge less rent, but offer substandard and unsafe housing in return. Families or individuals who fall behind in their rent risk poor credit ratings at best and eviction and homelessness at worst. Children with high rates of residential transience are likely to also have high rates of school transience and resulting educational deficits. Adults with significant housing stress have a much harder time maintaining stable employment, especially if they have to add the cost of child care or transportation to their already stretched household budgets.

The relationship between housing affordability and housing stability is well illustrated in the findings of research that examined predictors of family homelessness.[4] Families receiving public assistance who requested emergency shelter and a comparison group of other families on public assistance who did not need emergency shelter were interviewed on a range of dimensions and reinterviewed five years later. The only variable that correlated with housing stability for the formerly homeless families was receipt of housing assistance, that is, financial aid that closed the gap between their incomes and the cost of housing.

Solving a Solvable Problem

This leads us to a discussion of the solutions to what we believe is a solvable problem. The Coalition advocates for a multi-pronged strategy that begins with income policy and measures to improve the economic well-being of low income families, including increasing the minimum wage, expanding the earned income tax credit, living wage requirements, education and training that improves employment prospects, and economic development that creates better paying jobs.

Housing Vouchers

Increasing the ability of low income families to compete in the housing market is also the objective of the federal housing voucher program. Expansion of the number of new vouchers each year, coupled with a range of reforms that will improve voucher utilization, should be basic to any strategy that this committee advances. While we applaud Secretary Martinez's decision to seek 34,000 new vouchers in this year's HUD budget request, the data presented to you today clearly indicates the inadequacy of this initiative.

Housing Preservation

In a multi-pronged strategy to solving the affordable housing crisis, the vouchers vs. hard units debate becomes irrelevant. Preservation of the existing assisted housing stock, principally public housing and Section 8 project-based housing, in which the federal taxpayer has invested considerable resources, is sound housing policy. No one supports keeping housing that is deteriorated beyond repair, but housing that is in good condition and is now someone's home should be cared for as we care for other publicly funded structures. Cuts to the public housing capital fund as the Secretary proposes are short-sighted. Besides dealing with the backlog in capital improvements to public housing, federal policy should support the transfer of privately owned assisted housing to the non-profit housing sector committed to assuring its long term affordability.

Housing Production

The third element of a comprehensive housing policy is continued replenishment of the affordable housing stock. The federal retreat from affordable housing production that began in the late 1970s must be understood as contributing to today's housing crisis.[5] Resources and incentives for the building of new rental housing have lagged far behind the demand, and the shortage of affordable rental housing in many communities is the result. In the last full year of the Ford Administration, HUD's budget authority was three times what it is today. In the same time period, total federal budget authority has almost doubled. While low income housing outlays have increased at a slow rate, housing related tax expenditures have quadrupled in the last 25 years. The more expensive one's home is, the greater the subsidy one receives through tax expenditures. The value of homeowner assistance via the tax code is now nearly four times greater than the HUD budget. Back to Coalition MainPage