The Department of Housing & Urban Development (HUD) has presented a report to Congress titled “Worst Case Housing Needs.” The report provides national data and analyzes the critical problems of low-income renting families. The report primarily draws on data from the 2021 American Housing Survey (AHS), which is a comprehensive housing survey conducted by the U.S. Census Bureau since 1973.
Households with worst-case housing needs are very low-income renters— households with incomes at or below 50 percent of area median income—who do not receive government housing assistance and who pay more than one-half of their income toward rent, live in severely inadequate conditions, or both. The 2023 report finds that in 2021, during the COVID-19 pandemic, 8.53 million households had worst-case housing needs. This is an increase in worst-case needs from the record high of 8.48 million in 2011 and 70 percent greater than the 5.01 million households with worst-case housing needs in 2001.
These figures reflect the declining supply of units that are both affordable and available to very low-income renters at a time when demand is rising. Although the AHS data collection does not capture the effect of the one-time COVID-19 stimulus payments or the Emergency Rental Assistance program, government relief measures provided over the pandemic have helped to offset the dire needs of many families with worst-case needs.
This very low-income renter population accounts for about 15 percent of U.S. households.
The study makes it clear that increasing affordable housing through both more supply and more rental assistance is the key to decreasing these numbers. This report finds that in 2021, only 57 affordable units (including those with rental assistance) were available for every 100 very low-income renter households. Only 36 affordable units were available for every 100 extremely low-income renter households.
According to the study’s authors, the serious scarcity of housing units affordable to the most vulnerable households and hard-working families makes it essential to prioritize the production of affordable units, reducing regulatory barriers to affordable housing production and providing technical assistance to local governments to assist in removing barriers that drive up housing costs. Providing income support to very low-income renters can also help address worst-case needs. As these longer-term strategies take effect and as the nation emerges from the pandemic, increasing access to rental assistance may be essential to sustain affordable housing and prevent homelessness.
Details of the Study
- The prevalence of worst-case needs was 52.6 percent among Asian households, 47.4 percent among Hispanic households, 44.1 percent among non-Hispanic White households, 41.6 percent among Native Hawaiian or Other Pacific Islander households, 39.3 percent among non-Hispanic Black households, and 36.4 percent among American Indian or Alaska Native households.
- Between 2019 and 2021, the prevalence of VLI renters with severe problems increased by 3.2 percentage points for non-Hispanic Blacks, by 2.3 points for Hispanics, by 0.4 points for non-Hispanic Whites, and by 12.2 points for other races or other ethnicities.
- More than 8.5 million renter households had worst-case needs in 2021, of whom 3.17 million lived in the South, 2.25 million lived in the West, 1.62 million lived in the Northeast, and 1.48 million lived in the Midwest.
- This report includes a new analysis of the intersection between worst-case needs and the related but less prevalent problem of housing overcrowding. Overcrowding is defined as having more than one person per room, counting only rooms that are finished and used on a regular basis.
- In 2021, about 948,000 very low-income renter households, or 4.9 percent, were overcrowded.
- Of these, 390,000 households also experienced worst-case needs.
The study concludes by pointing out that reductions in worst-case needs generally result when economic growth improves household incomes, when the production of affordable housing is sufficient to reduce market rents, or, alternatively, when the availability of rental assistance increases. Rental housing assistance—such as that offered by HUD programs, other federal programs, states, or localities—helps many vulnerable renter households who have such limited incomes.
A broad strategy at the federal, state, and local levels has long been needed to continue to grow the economy, support market production and access to affordable homes, and provide rental assistance to the most vulnerable households. With the impact of the COVID-19 pandemic and associated economic difficulties in 2020 and 2021, worst-case housing needs have increased substantially, reaching a new record high and highlighting more than ever the need for a comprehensive approach to addressing the affordable housing crisis.
However, based on current Congressional priorities, it is unlikely that any meaningful steps to address this affordability crisis will be taken anytime soon. Congress will almost certainly – as it always does – take a band-aid approach to the crisis.