Affordable Housing Crisis Requires Expanding Rental Assistance and Adding Housing Units:

Rents have increased over the last two years at a historic rate. Between December 2017 and September 2022, the median rent for newly leased units rose nearly 32 percent, with nearly all of that increase occurring in 2021 and     2022. These higher rents are especially hard for families with the lowest incomes to absorb. Closing the housing affordability gap will require a comprehensive housing strategy, including developing new units, preserving existing affordable housing, and expanding rental assistance. Expanding the Housing Choice Voucher program, as the 2023 House-passed Transportation-Housing and Urban Development (HUD) funding bill calls for, would most immediately help renters absorb cost increases. Such an expansion would help reach renters with the lowest incomes.

Over the long term, lawmakers should enact major additional rental assistance expansions, with the goal of making assistance available to everyone who is eligible. Rental assistance provided directly to tenants gives people more choices of where to live and the opportunity to reduce segregation of people with low incomes, can also be project-based to support new affordable housing units.

Policymakers at the federal, state, and local levels can further address the crisis in housing affordability by making additional capital investments in housing and taking related actions, including:
• Reducing the shortage of deeply affordable rental housing, implementing a housing developer-focused renters’ tax credit, and reversing restrictive local zoning practices;
• Preventing the loss of existing affordable housing;
• Improving the Low-Income Housing Tax Credit program;
• Investing in tribal communities’ housing needs;
• Removing barriers to homeownership; and
• Reforming project-based housing programs to encourage higher-quality housing.

While rising rent costs are currently headline news, the housing affordability crisis has existed for years, primarily due to the gap between families’ incomes and their rent costs. This, coupled with the fact that federal rental assistance only reaches about 1 in 4 likely eligible households, means that millions of families have long struggled to afford housing and meet other basic needs such as food, clothing, and transportation.

In 2019, about 9.4 million households without rental assistance paid more than 50 percent of their income on rent or lived in severely inadequate housing. Of these renters, 7.8 million were very low income, defined by HUD as at or below the federal poverty line or 50 percent of the area median income, whichever is higher. These counts don’t include the almost 600,000 people who experience homelessness on any given night,4 or the millions of people who are living doubled up or are unnecessarily institutionalized due in part to an inability to afford a place to live on their own.

The federal government began investing in public housing developments to make housing affordable to people with low and moderate incomes. Initially, in the aftermath of World War II, primarily white people lived in public housing due to housing segregation and a federal focus on the housing needs of returning white war veterans. Public housing developments helped residents quickly stabilize their housing and move on to unassisted housing and homeownership.

But over time — and not coincidently — as people of color increasingly moved into public housing units, the government failed to provide enough funding to make up the growing gap between what people could pay in rent and what it cost to maintain developments in good condition, which caused public housing properties to deteriorate and surrounding communities to suffer. It’s estimated that over $70 billion is currently needed to revitalize public housing; that amount doesn’t include addressing the lack of adequate ongoing maintenance costs.

As a result, families with the lowest incomes have limited access to public housing, nor can they find housing that is affordable given their incomes in the private rental market. Even if landlords charged only what they’d need to cover their costs of ongoing operations, general maintenance, and debt payments owed on the development, the rents would exceed many people’s ability to afford their rent.