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Report: Affordable Housing Increasingly Unavailable to Low-Income Renters
July 21, 2015
Here at the Alliance, we believe that homelessness has a solution: housing. This solution sounds simple, right? In many ways, it is.
So if the solution to homelessness is so simple, why haven’t we ended homelessness yet? In large part, the answer lies in a lack of affordable housing. Recent economic and housing trends have resulted in a shortfall of affordable housing, particularly for low-income households. This in turn has left many people homeless and many more people vulnerable to homelessness.
A recent report on housing and rental market trends from the Joint Center for Housing Studies at Harvard University, The State of the Nation’s Housing, shows that rents have been rising across the nation while the supply of affordable housing has been falling. The growing disparity has forced many low-income renters (particularly those in high-cost markets) into precarious positions and placed them at particular risk of homelessness.
Let’s take a closer look at the report’s data, which shows this disturbing trend in greater detail:
- In 2014, the national vacancy rate—or the percentage of apartments in a given market that are available to rent—fell to 7.6 percent. This is the lowest vacancy rate has been in almost 20 years.
- To make matters worse, the vacancy rate units that rent for under $800 per month—i.e., units that are more affordable for low-income households—dropped by 12 percent from 2013 to 2014. The vacancy rate decrease for these units alone accounted for over 90 percent of the total decline in vacancies.
- In accordance with the laws of supply and demand, rents have continued to rise as the vacancy rate has continued to fall. From 2013 to 2014, rents rose by 3.2 percent; in the same time period, the rate of inflation was only 1.6 percent. In other words, rents have increased at double the rate of inflation.
- Rising rents mean that increasing numbers of households are cost-burdened. In 2013, more than 80 percent of households with federal minimum-wage incomes ($15,000 or less per year) were cost-burdened, or spending more than 30 percent of household income on rent. When households are cost-burdened, they’re forced to cut back on other basic needs, such as food, transportation, and health care.
- In 2013, there were only 34 affordable units for every 100 extremely low-income renters. This is because there was an affordable housing shortfall of 3.9 million units for this population: there were 11.2 million renters with extremely low incomes but only 7.3 million affordable units. This shortfall nearly doubled from 2003 to 2013.
This data presents a grim picture. Simply put: the solution to homelessness is housing, but there often aren’t enough affordable homes to end homelessness. Without access to affordable housing, many communities struggle to access housing for consumers.
This is a serious and growing problem. So what can you do to help? The State of the Nation’s Housing offers a solution: advocate government on all levels to prioritize affordable housing. Without a strong national commitment to affordable housing for all, it is unlikely that the trends presented in this report will reverse course.
Vacancy rates will continue to fall, rents will continue to rise to meet demand, more households will become cost burdened, and more households will become vulnerable to homelessness. By ensuring governmental commitment to affordable housing, we can work to ensure that households vulnerable to homelessness never have to experience it.
Graphic from the The State of the Nation's Housing, Joint Center for Housing Studies at Harvard University.