Poorest families find fewer affordable homes
By Matthew Cardinale IPS | Last updated: Jan 8, 2010 - 1:47:03 PM
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The coalition analyzed data from the 2008 American Community Survey. It found that the shortage of homes affordable to extremely low-income families grew from 2.7 million in 2007 to 3.1 million in 2008—about 400,000 units.
Extremely low-income families are defined as those earning less than 30 percent of the Area Median Income.
According to the report, released in December, the number of all renter households in the U.S. increased by 2.4 percent between 2007 and 2008, but the number of extremely low-income renter households increased even more, by 3.5 percent.
“It's a lot of people going through foreclosures entering the rental market, the result of the current economic situation,” explained Megan DeCrappeo, a research analyst for the housing coalition. “People are sort of being pushed out of home ownership.”
The number of extremely low-income households has increased because people's incomes are decreasing, Ms. DeCrappeo told IPS.
“They're kind of dropping into a new income group there. People are becoming unemployed because of the current situation, the recession—more and more people are becoming extremely low-income,” Ms. DeCrappeo said.
“For every 100 extremely low-income renter households, there were 39 rental housing units affordable and available for them in 2007. By 2008, the number of affordable and available units had declined to 37,” the report said. “A scarcity of housing that the poorest families can afford is the principle cause of homelessness in the United States.”
During the same period, the supply of all rental homes increased by 2.2 percent overall. However, the increase in supply was experienced by every income category except the low income group. For those households, the supply of affordable rentals decreased by 1.8 percent.
“In general, we've noted this kind of a trend for years. New housing generally is built in other income groups, not for ELI households,” Ms. DeCrappeo said. “While the demand grows in that sector, the supply doesn't keep up because it can be expensive to construct and operate housing for ELI households.”
“There have been all these foreclosures and increases in vacancy rates, but these (vacant units) are not at levels affordable to people of ELI groups,” she added. “They've had to take other measures, cut out food or health care costs, doubling up with friends and family, things like that.”
Ms. DeCrappeo said that some people with higher incomes are also moving into the units affordable to extremely low-income households.
“We're all kinds of competing for low-cost housing,” she said.
Asked if landlords raising rents has been part of the problem, Ms. DeCrappeo said the coalition has observed a decrease in rents overall, but not enough to reach the poorest households.
Ironically, even as the number of families needing affordable housing has grown, there is also an increase in vacant housing, including foreclosed homes as well as vacant upscale condominiums and apartments.
So why don't the owners of the condos just lower their rents? “The reason why so much housing for ELI households needs to be subsidized by the government is it's difficult to operate the housing (with such small revenues),” Ms. DeCrappeo said.
Another factor contributing to the decrease in the units is the mass demolition of public housing in cities and counties across the U.S. As previously reported by IPS, about 100,000 public housing units have been demolished under a controversial program called HOPE VI and another 100,000 have been demolished under Section 18.
The coalition has pushed for a National Housing Trust Fund, a fund that would allow states to build and maintain housing for this low income group “that has been underserved in this country.”
In 2008, the U.S. Congress approved what was seen as a grassroots victory for affordable housing advocates. However, the planned funding mechanisms for the Trust Fund have fallen through since then.
“It was authorized last year ... it hasn't been funded yet,” Ms. DeCrappeo said. The funding for the Trust Fund was supposed to come from a portion of excess revenue from government-sponsored enterprises, Fannie Mae and Freddie Mac, from the proceeds of new mortgages.
One possible funding source in the meantime is a new jobs funding package that was approved by the U.S. House. The U.S. Senate may take up the bill in 2010.
Out of $75 billion in total funding, $1 billion is supposed to fund public housing capital improvements and one billion is supposed to support the Trust Fund.