Many low-income Americans can’t even afford to rent

The poorest Americans, who can’t afford to buy property, are increasingly priced out of rentals.

There were only 28 adequate and available to rent homes for every 100 extremely low-income renters in 2013, down from 37 in 2000, according to the Urban Institute, a nonprofit and nonpartisan organization that focuses on social and economic policy. “This gap between supply and demand leaves 72% of the country’s poorest families burdened by the high cost of housing,” it found. Extremely low-income renters are households with incomes at or below 30% of the median income in that region.

Not one county in the U.S. has enough affordable housing for all these renters. Among the 100 largest counties, the number of affordable rental homes ranges from eight per 100 in Denton County, Texas, to 51 in Suffolk County, Mass. This regional disparity is partly due to federal assistance not keeping pace with population growth, says Erika Poethig, a director at the Urban Institute. Only nine of the 100 largest counties increased the number of affordable units for extremely low-income renters from 2000 to 2013.

Between 2000 and 2013, the number of extreme low-income renter households soared 38% from 8.2 million to 11.3 million as the Great Recession pushed more families toward the lower end of the income bracket, the report found. Among the 100 largest counties, five of the 10 counties with the smallest affordability gap are in Massachusetts. Only one—San Francisco—is outside the Northeast. “The geography of poverty is changing and federal housing policy has not kept up,” Poethig says, because the cost of living is so high in these areas.

As a result, renters at this income level depend increasingly on programs run by the U.S. Department of Housing and Urban Development. Depending on the area of the country, extremely low-income translates to incomes of between approximately $12,600 and $32,800 for a family of four. Without federal housing assistance, the report found, the share of extremely low-income American households who could afford adequate housing in 2013 would have fallen to 5%.

Renters would need to earn a full-time “housing wage” of $19.35 an hour to afford an average two-bedroom unit in the U.S. and $15.50 an hour for a one-bedroom unit, significantly more than the national minimum wage of $7.25 an hour, according to a separate report — “Out of Reach” — released last May by the National Low Income Housing Coalition. But rental households in San Francisco would need to earn $39.65 an hour for a two-bedroom unit in a state with a minimum wage of just $9.

“Many renters earn far less than the ‘housing wage’ in their community and struggle to find an affordable place to live, the report found. Rents for apartments have risen nationally for 23 straight quarters. Rising rents are due to an increased demand for rental housing, partly due to flat wage growth, job loss and inability to qualify for a mortgage. As of the third quarter of 2014, rents were more than 15% higher than at the tail end of the Great Recession in 2009, the report found.

By Quentin Fottrell
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