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Report Shows Persistent Housing Affordability Problems for Low-Income Families
Loss of Affordable Rental Properties Major Factor

Housing affordability problems persist for many families despite falling home prices, stagnant rents and growing vacancies, according to a report released in June by the Joint Center for Housing Studies of Harvard University.

Titled “The State of the Nation’s Housing 2010,” the study reveals some optimistic trends for the nation’s housing market but also argues that this fragile progress is highly dependent on continued job growth, “the most important and uncertain variable in the recovery of the housing market.”

As households lost jobs and income in the economic downturn, the percentage of Americans spending upwards of half of their income on housing jumped from 12% in 2000 to 16% by 2008. Nearly a quarter of renters and one in eight owners had severe cost burdens in 2008, with the number of severely cost-burdened households increasing by 640,000 between 2007 and 2008 alone. The report highlights the particularly stark challenges faced by the nation’s 4.5 million single-parent households, which collectively contain 9.1 million children. These households have fewer monetary resources but a greater need for large living spaces and higher quality neighborhoods. In addition, the study reveals that the number of families with multiple earners dropped by 2.7 million between 2007 and 2009 while the number of households with no earners increased by 2.2 million.

According to the report, a major factor contributing to the decrease in housing affordability is the loss of low-cost rental properties due primarily to demolition, conversion to ownership or increased rents. For example, between 1997 and 2007, more than a quarter of these units that would rent for less than $400 in 2007 dollars were lost, over 13% to demolition alone.

“The study clearly shows that low-income families who have always struggled to find decent housing are facing an even greater burden as jobs and affordable housing units continue to be lost,” said Stephanie Wiggins, Chief Investment Officer — Multifamily Finance for the AFL-CIO Housing Investment Trust (HIT). “The HIT is working to help reverse this trend through its investment of millions of dollars of union pension capital to create jobs and housing.” She adds that since 2001, the HIT has helped finance over 26,000 units of affordable housing in communities around the country while generating over 20,000 union construction jobs.

“The State of the Nation’s Housing” is an annual report that examines national trends related to rental housing and homeownership and discusses what might be expected in the coming year. The current report can be viewed here.