The Shortage of Affordable Homes 2023:

The nation’s lowest-income renters have long faced a severe shortage of affordable housing, and the problem has only worsened in recent years, as record-high inflation and the loss of low-cost rental homes have impacted renters nationwide. Though inflation has cooled and rent prices have flattened entering 2023, the nation’s lowest-income renters still face enormous challenges finding and maintaining safe and affordable rental housing.

Each year, the National Low Income Housing Coalition (NLIHC) estimates the availability of affordable rental homes, with a particular focus on the housing needs of households with extremely low incomes, defined as incomes at or below either the federal poverty guideline or 30% of the area median income (AMI) – whichever is greater. These households account for one-quarter, or 11 million, of the nation’s 44.1 million renters and experience significant rates of financial and housing precarity. NLIHC’s annual Gap report provides estimates of affordable housing needs in the U.S., including in each state, the District of Columbia (D.C.), and the largest metropolitan areas. The key findings of this year’s report are as follows:

• The shortage of affordable rental housing primarily impacts renters with extremely low incomes. Extremely low-income renters in the U.S. face a shortage of 7.3 million affordable and available rental homes, resulting in only 33 affordable and available homes for every 100 extremely low-income renter households.
• The shortage of affordable rental housing worsened during the pandemic. Between 2019 and 2021, the shortage of affordable and available rental homes for extremely low-income renters worsened by more than 500,000 units, or 8%.

• Black, Latino, and Indigenous households are disproportionately extremely low-income renters and are disproportionately impacted by this shortage. Nineteen percent of Black non-Latino households, 17% of American Indian or Alaska Native households, and 14% of Latino households are extremely low-income renters, compared to only 6% of white non-Latino households.

• Extremely low-income renters are the most likely renters to spend a high share of their income on rent. Seventy-two percent (8.1 million) of the nation’s 11.0 million extremely low-income renter households are severely housing cost-burdened, spending more than half of their incomes on rent and utilities. They experience severe cost burdens at more than double the rate of any other income group and account for more than 72% of all severely housing cost-burdened renters in the U.S.

• The dearth of affordable and available homes for extremely low-income renters impacts all states and the 50 largest metro areas, none of which have an adequate supply for the lowest-income renters. The current relative supply by state ranges from 17 affordable and available homes for every 100 extremely low-income renter households in Nevada to 58 in South Dakota. In 12 out of 50 of the country’s largest metro areas, the absolute shortage of affordable and available homes for extremely low-income renters exceeds 100,000 units.

These findings underline the importance of large-scale, long-term policy solutions to meet the housing needs of renters with the lowest incomes. Any reduction in federal affordable housing resources will only exacerbate the existing shortage, which is already acute. The federal government must preserve and expand the stock of deeply affordable housing, expand housing vouchers to all eligible households, invest in a housing stabilization program that provides renters with emergency funds when they experience unexpected financial shocks and strengthen and enforce renter protections.

State and local governments also have an important role to play in improving access to affordable housing, including reforming zoning and reducing other land-use restrictions to bolster affordable housing development. These local reforms are necessary, but insufficient without federal resources, for eliminating the shortage of affordable rental housing for the nation’s lowest-income renters.

The past three years – characterized by a global pandemic, widespread job losses, record-breaking inflation, unusually low vacancy rates, and skyrocketing rental prices–have underlined and exacerbated the financial precarity experienced by the nation’s lowest-income renters. Between January 2021 and December 2022, rental prices increased by 22% nationally (Apartment List, 2022). These rent increases occurred across the country and were not confined to certain markets.