- About Homelessness
- News & Events
- Take Action
- About Us
- Ramping Up Rapid Re-Housing Series
What is “sustainable” housing cost burden? Implications for HPRP
Solutions Brief | June 25, 2010
Increasingly, communities and programs are providing homeless and at-risk families with short term rental assistance. In assessing which families to help, one of their primary concerns is to help families that will be able to sustain their housing once the short subsidy ends. To inform their choices about whom to help, this Fact Sheet examines the level of housing cost burden that poor families typically carry (and that the families assisted with these programs could therefore, presumably, carry). While by no means promoting a high and sustained housing cost burden, and while not looking at all of the factors that could affect a household’s housing future, the Fact Sheet does show that most poor families carry a high housing cost burden without becoming homeless.
Background. In recent years, many programs have been created to provide short-term rental assistance to people who are homeless or at risk of homelessness, including ones funded through HUD’s Homelessness Prevention and Rapid Re-Housing Program (HPRP). Several providers of time limited rental assistance question whether households can sustain their housing after their subsidy ends. This fear has led some of these programs, including some funded by HPRP, to screen out potential recipients because of concerns about future housing cost burden.
The federal government has established a benchmark of 30 percent of income as the maximum amount a household should pay for housing. This level helps ensure that households can afford housing and other necessities such as food, health care and clothing. Evidence indicates that housing is much more stable when housing costs meet this standard. For example, households that receive Housing Choice Vouchers—which limit housing costs to 30 percent of income—have much lower rates of homelessness and housing instability. However, many households do not become homeless even though they pay far more than 30 percent of their income for housing.
Analysis. The analysis—summarized in the chart—finds that high housing cost burdens are common among households in poverty. More than half of households in poverty spend more than half their income for housing, which is generally considered the threshold for "severe housing cost burden." In other words, reasonable housing cost burdens—such as the 30 percent federal standard—are the exception among households in poverty.
Despite these housing cost burdens, no more than 10 percent of people in poverty become homeless over the course of a year. There is less evidence about how they manage to avoid homelessness with such high housing costs, but two important factors are income variability and support networks.
The findings indicate that homelessness prevention and re-housing providers should not screen out potential recipients solely because of potentially high housing cost burden in the future. Once a prevention or re-housing program addresses the immediate housing crisis, most households will avoid future episodes of homelessness, even if they have very high housing cost burdens. Though these housing cost burdens cause hardship for the households that face them, and although deeper and longer term subsidy would be far preferable, when only short term assistance is available, it is preferable to homelessness.