Addressing America's Affordable Housing Crisis

Over the past few years, the COVID-19 pandemic, record-high inflation, significant job losses, and rising rent prices have shaped the affordable housing landscape. Between 2019 and 2021, the shortage of homes affordable and available to renters with extremely low incomes worsened by more than 500,000 units, increasing from a shortage of 6.8 million to 7.3 million, and continuing a long-term trend of diminishing supply. Addressing the shortage of affordable and available housing is vital to ensuring families across the US experience financial security, improved health, educational opportunities, and greater economic mobility.

The National Low Income Housing Coalition’s latest annual report evaluates the availability of affordable rental homes, particularly for households with extremely low incomes, defined as incomes at or below either the federal poverty guideline or 30 percent of the area median income. The report uses data from the 2021 American Community Survey Public Use Microdata Sample to catalog and analyze the state of affordable housing in the US. Additionally, the report identifies local, state, and federal policies and programs that can be implemented to address the shortage of affordable homes.

Key findings

• Renters with extremely low incomes face the biggest challenges to finding affordable housing. There are only 7 million affordable units for 11 million households with extremely low incomes, but of the 7 million, 3.3 million are occupied by households with higher incomes.
• There is a shortage of 7.3 million affordable and available rental homes for renters with extremely low incomes in the US, up 8 percent from 6.8 million in 2019.
• The lack of housing options for renters with extremely low incomes are driving the overall affordable housing shortage across the country. For other income groups, there are enough affordable rental units to accommodate all households, but they aren’t necessarily available.
• Among renters with extremely low incomes, roughly 2.6 million reside in homes affordable to households with very low incomes, 3.5 million are in homes affordable to households with low incomes, and 1.3 million reside in homes affordable to households with middle and higher incomes.
• Households with extremely low incomes disproportionately experience severe housing cost burdens, meaning they spend more than 50 percent of their income on housing.
• The shortage of affordable rental units disproportionately affects Black, Latinx, and Indigenous households who are more likely than white households to be renters and have extremely low incomes. Nineteen percent of Black renter households, 17 percent of American Indian or Alaska Native renter households, and 14 percent of renter Latino households have extremely low incomes, compared with only 6 percent of white households.
• Though renters across the country feel the affordable housing shortage, renters with extremely low incomes face the most severe shortages in Nevada, Oregon, Florida, California, Arizona, and Texas.
• In all 50 of the largest metropolitan areas, more than 60 percent of renters with extremely low incomes are severely cost burdened.

Policy implications

• The authors of this report emphasize the need for large-scale, long-term policy solutions to address the growing housing needs for renters with the lowest incomes.
• State and local governments can leverage land-use and zoning reform policies to encourage the development of more affordable housing.
• Though local efforts are extremely important, the authors stress their limited ability to create and preserve affordable housing at a sufficient scale.
• Significant, lasting investments from the federal government are vital in addressing the shortage of affordable housing units. The authors recommend increasing funding in affordable housing programs, such as the national Housing Trust Fund, to spur the development of more affordable housing units.
• The authors suggest increasing investments in the Housing Choice Voucher Program or a renters’ tax credit to help address the shortage of affordable and available units for renters with extremely low incomes.
• In the short term, policymakers can consider establishing a permanent version of the COVID-era Emergency Rental Assistance Program to prevent evictions and homelessness for renters with low incomes.
• The authors also recommend expanding federal renter protections, such as prohibiting discrimination based on source of income, which would address power imbalances between renters and landlords and help prevent housing instability.