Rental Housing Assistance - The Worsening Crisis
Washington, D.C. 20410-0001
I am pleased to transmit Rental Housing Assistance—The Worsening Crisis, HUD's 1999 report on the nation's worst case housing needs. This report provides a detailed and comprehensive look at the effects of the affordable housing crisis on renters in the United States.
The data contained in this report confirm a single disturbing trend: that, despite the booming economy, worst case housing needs continue to increase. Worst case housing needs have now reached an all-time high of 5.4 million households. There are now 600,000 more households with worst case housing needs than there were in 1991 when the current economic recovery began - a rate of increase that is almost twice as fast as overall household growth.
These findings make a clear and compelling case for greater federal attention to our nation's housing needs. With worst case needs at record levels, there is an urgent need to strengthen federal efforts to assure adequate supplies of decent, safe and affordable housing for America's lowest-income families.
Among the report's key findings are the following:
- Despite continued economic expansion, worst case housing needs have reached an all-time high of 5.4 million families, increasing by 4 percent between 1995 and 1997. Households with worst case needs are defined as unassisted renters with incomes below 50 percent of the local median, who pay more than half of their income for rent or live in severely substandard housing.
- Families with worst case needs are working harder than ever. Between 1991 and 1997, worst case needs increased more than three times as fast for very-low-income families with full-time wage earners than for all other very-low-income families.
- Housing that is affordable to the lowest income Americans continues to shrink. The number of rental units affordable to extremely-low-income families decreased by 5 percent since 1991 - a loss of over 370,000 units.
- The concentration of worst case housing needs among the poorest families continues to rise. Between 1991 and 1997, worst case housing needs became increasingly concentrated among households with extremely low incomes. By 1997, over three-fourths of those with worst case needs had incomes below 30 percent of area median.
- Worst case housing needs increased dramatically in minority households during the 1990s. Increases were particularly high for Hispanic households and working minority families with children, whereas needs among non-Hispanic whites were stable.
- Poor families living in the suburbs most frequently face worst case needs. Over one-third of worst case households live in the suburbs. Reflecting housing market pressures from population and job growth, declines in units affordable to extremely-low-income families were greatest in the suburbs during the 1990s.
A wide range of market forces and other factors have contributed to the decline in affordable housing. A significant factor has been the simple economics of supply and demand: as the economy heats up, rents are rising at a faster rate than incomes of our poorest families. Another key factor was the lack of federal support for new rental assistance during a crucial four-year period covered by this report, from 1995-1998, when no additional units of rental assistance were enacted.
Fortunately, that has changed. For the past two years in a row, Congress has approved new housing vouchers -- 50,000 in 1998 and another 60,000 in 1999. This year, the President's FY 2001 budget includes funds for an additional 120,000 incremental vouchers, a critical next step toward reducing worst case needs.
Other elements of the Administration's FY 2001 budget will play an important part in addressing the needs highlighted in this report. They include CDBG, HOME and the Low-Income Housing Tax Credit - all programs that successfully produce housing that is affordable for very low-income households. Combining these programs with a continued expansion of tenant-based rental assistance is an essential component of the Administration's strategy to reduce worst case needs.
But we can -- and should -- do more. A recent analysis of the FHA Insurance Fund for FY 1999 places the value of the Fund at more than $5 billion above previous projections. On March 7, President Clinton directed HUD, along with other members of the Administration, to develop recommendations on how best to use these funds to strengthen federal housing programs and enhance comprehensive affordable housing opportunities. Over the next few months, I will work to ensure that our recommendations reflect the worst case needs identified in this report.
I look forward to working with the Congress to reverse the trends documented in this report. America is currently experiencing a period of unprecedented prosperity. But too many Americans are not yet sharing in this success. We need a bold federal commitment to affordable housing if we are to fulfill our nation's responsibility to its neediest citizens.