The United States has long faced a significant shortage of affordable rental housing. The shortage is caused by a systemic failure of the private market to serve renters with the lowest incomes, who are disproportionately people of color, seniors, and individuals living with disabilities. Without public subsidy, what renters with extremely low incomes can afford to pay for rent does not cover the development and operating costs of new housing and is often insufficient to incentivize landlords to maintain older housing. At the same time, due to severe underfunding, three out of four households eligible for federal assistance do not receive it (Mazzara, 2021).
The shortage of affordable housing has worsened over the past few years, exacerbated by rising rent prices and job and wage losses during the pandemic. Although most economic indicators suggest the economy is recovering, the supply of affordable housing for the nation’s lowest-income renters remains deeply inadequate.
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 11 million, or nearly one-quarter, of the nation’s 45.1 million renters. 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 include:
• 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 34 affordable and available homes for every 100 extremely low-income renter households.
• The shortage of affordable rental housing is more acute than it was before the pandemic. Between 2019 and 2022, the shortage of affordable and available rental homes for extremely low-income renters increased by over 480,000.
• Black, Latino, and Indigenous households are disproportionately extremely low-income renters and disproportionately impacted by this shortage. Nineteen percent of Black non-Latino households, 16% of American Indian or Alaska Native households, and 13% of Latino households are extremely low-income renters, compared to only 6% of white non-Latino households.
• Extremely low-income renters are more likely than other renters to spend a large share of their income on rent. Eighty-seven percent are cost-burdened and 74% are severely costburdened. Extremely low-income renters account for nearly a quarter of all renters, but 44% of all cost-burdened renters and 69% of severely cost-burdened renters.
• The shortage 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 low-income renters. The current relative supply by state ranges from 14 affordable and available homes for every 100 extremely low-income renter households in Nevada to 57 in South Dakota. Thirty-five of the largest 50 metros have fewer than the national level of 34 affordable and available units for every 100 extremely low-income renters.
These findings underline the importance of large-scale, long-term policy solutions that deeply target the housing needs of renters with the lowest incomes. Any reduction in federal affordable housing resources will exacerbate existing challenges, which are already acute. The federal government must make a sustained commitment to preserve and expand the stock of deeply affordable housing, bridge the gap between incomes and rent through universal rental assistance, and provide emergency assistance to stabilize renters when they experience financial shock.
State and local governments also have an important role to play in improving access to affordable housing, including providing subsidies, reforming zoning, and reducing other local restrictions to bolster housing production. 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.