I know I have been mostly blogging about problems lately. All of this negative housing news can be depressing. I really have been looking hard for some positive news in affordable housing. For example, I did just point out yesterday that Texas might get a housing trust fund increase. That is sure good news. But mostly I keep running into bad news.
The latest comes in the form of the annual report of Harvard’s Joint Center for Housing Studies. The State of the Nation’s Housing 2008 summarizes national housing trends for a wide audience of policymakers, practitioners, industry decision makers, academics, affordable housing advocates, and public sector leaders.
Download the The State of the Nation’s Housing 2008 report. [Note: this is a large PDF files (5,26 MB)]
Here are some findings…
Affordability problems are edging up the income scale
While low-income renters make up the largest share of severely burdened households, a rising number of middle-income homeowners also face cost pressures. Between 2001 and 2006, the number of severely burdened renters in the bottom income quartile increased by 1.2 million, while the number of severely burdened homeowners in the two middle-income quartiles ballooned by 1.4 million.
Sadly, 12.7 million children—more than one out of six—in the United States live in households paying more than half their incomes for housing. The 13.8 million children in low-income households—and particularly those headed by minorities and single parents—are especially likely to live in these circumstances.
For many of these vulnerable families, high housing outlays mean cutting other spending to the bone. In 2006, severely housing cost-burdened households with children in the bottom expenditure quartile had only $548 per month on average for all other needs. As a result, these families spent 32 percent less on food, 56 percent less on clothes, and 79 percent less on healthcare than families with low housing outlays.
The housing availability gap for the lowest income households has grown to six million units (see chart below). There are a little over nine million renter households in the lowest income group and slightly over six million rental units affordable to this population. But of the six million existing units, more than two million are occupied by households with higher incomes. Closing the low income rental housing availability gap is the most important task in affordable housing today. The goal of the National Low Income Housing Trust Fund is to produce 1.5 million new housing units in this affordability category over the next several years. This will be the first major effort in many years to close the housing availability gap.
Challenges of Disabled Veterans
Veterans with disabilities make up 29 percent of the 16.4 million veteran households, but 42 percent of the more than 1.5 million veterans with severe housing cost burdens. Low incomes are a key factor, with fully one in three working-age veteran householders with disabilities in the bottom income quartile, compared with just one in ten without disabilities. Even after controlling for income, however, the incidence of severe housing cost burdens is still slightly higher among younger veterans with disabilities than those without. This is in stark contrast to the experience of older disabled veterans and the disabled low-income population in general, who normally have lower cost burdens because they receive priority in the allocation of rental assistance.
Veterans are also overrepresented among the homeless. While accounting for only 10 percent of all adults, veterans make up between 23 percent and 40 percent of homeless adults.
Despite the alarming scope of affordability problems, housing assistance represents a small and shrinking share of the federal budget. From 1997 to 2007, housing assistance programs fell from 10 percent to 8 percent of the nation’s dwindling domestic discretionary outlays. And even though the number of households with severe burdens rose by more than 20 percent from 2001 to 2005, the share of renter households receiving assistance barely budged.
Ominously the numbr of households suffering “severe housing cost burdens” (maining they spend 50 percent or more on housing) is growing to include more middle income homeowners as a result of the increasing costs of mortgages with adjustable rates (see chart below).
The weakness of the economy does not bode well for income growth in the short run. But even in the longer run, the housing cost pressures on working Americans are unlikely to lighten. Much of employment growth will continue to be in part-time and low- wage positions. This trend, together with the high operating costs of housing and the restrictions on building modest homes at higher densities, makes efforts to meet the nation’s affordability challenges an uphill battle.
Thus far, there has been little national outcry about the fact that growing numbers of low- and middle-income families are spend- ing half or more of their incomes on housing, and that so many children are living in unhealthy, unsafe conditions—or, worse yet, forced to make their way on the streets. The grim plight of many veterans has also failed to rally a groundswell of support to tackle these urgent issues.
So the big view of hosuing affordability is grim accroding to the Harvard study.
Now I am off to look for some positive news to blog.