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95
3
11
3
RENTAL HOUSING
ASSISTANCE-
THE CRISIS
CONTINUES
The 1997 Report to Congress on
Worst Case Housing Needs
PDR
U.S. Department of Housing and Urban Development
Office of Policy Development and Research
DEPARTMENT as YOUSING
AND, URBAN
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
WASHINGTON, D.C. 20410-0001
April 1998
TO THE CONGRESS OF THE UNITED STATES:
I have the privilege of transmitting Rental Housing Assistance-The Crisis Continues, the worst
case housing needs report for 1997 as requested by the Senate Appropriations Committee in 1990. The
report presents clear and compelling evidence of deep and persistent housing problems for Americans
with the lowest incomes. The report makes it clear that the Federal government must significantly en-
hance its efforts to create more affordable housing opportunities for these households.
This report has four major findings:
Despite robust economic growth between 1993 and 1995, the number of very-low-
income American households with "worst case" housing needs remained at an all-time
high-5.3 million. 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.
The stock of rental housing affordable to the lowest income families is shrinking and
the Congress has eliminated funding for new rental assistance since 1995. Between
1993 and 1995 there was a loss of 900,000 rental units affordable to very-low-income
families (those with incomes below 50 percent of area median income), a reduction of
9 percent. There was an even greater reduction-16 percent-in the number of units afford-
able for extremely-low-income renters, those with incomes below 30 percent of area median.
Since 1995. Congress has denied the Administration's requests for new rental assistance to
mitigate worst case needs. This is a historic reversal of Federal housing policy. From the
Great Depression until 1995-under both Democratic and Republican Administrations and
in periods of economic boom and recession-Congress always expanded the availability of
rental assistance. As the report makes clear, it should do so now.
From 1991 to 1995, worst case needs increased the fastest among the working poor.
Full-time work should provide a family with an income sufficient to afford a decent place to
live. This study documents a disturbing trend in the opposite direction. In the economic
recovery between 1991 and 1995, worst case needs increased fastest among working
households. Between 1991 and 1995, the number of working poor households with worst
case needs increased by 265,000, or 24 percent. In 1995, almost 1.4 million of the
5.3 million households with worst case needs had earnings equivalent to a full-time worker
at the minimum wage.
One of every three households with worst case needs now lives in the suburbs. While
the greatest numbers of worst case needs are in central cities, a large and fast-growing
number of households in need of assistance live in the suburbs. More than 1.8 million
households with worst case needs-or one of every three worst case households-lived in
the suburbs in 1995, an increase of 9 percent from 1991.
The data in this report confirm what housing practitioners already know about the overwhelming
unmet need for housing assistance. More than one million families are on waiting lists nationwide forcing
families to wait years before getting assistance. When the waiting list for Chicago's Section 8 certificate
and voucher program was opened for two weeks in the summer of 1997, 100,000 applications poured in.
Administrators were forced to tell three-quarters of these applicants that they would have to wait more
than five years for assistance. There are 17,700 households on waiting lists in San Diego, 12,000 in
suburban St. Louis County, and 5,000 in Spokane, Washington.
The report's findings make a clear and compelling case for greater Federal attention to housing
needs. Economic growth alone will not ameliorate the record-level housing needs among families with
limited incomes. Not even families working full-time at minimum wage can afford decent quality housing
in the private rental market. The report also makes clear that this is not just a big city problem, but affects
America's growing suburbs as well.
To address these problems, the Administration has asked Congress to resume the expansion of
rental assistance for low-income Americans. President Clinton's fiscal year (FY) 1999 budget requests
103,000 Section 8 units for families and individuals who cannot afford to rent decent housing. Fifty
thousand of these housing vouchers would be used by families making the transition from welfare to work.
The Administration has also proposed expansion of programs to help build and rehabilitate more
affordable housing. The FY 1999 budget expands funding for the HOME program and proposes a new
HOME Bank, a new loan guarantee feature allowing communities to leverage up to five times their annual
grant amounts for larger scale projects. The Administration also proposes a substantial expansion of the
Low Income Housing Tax Credit program that would produce 180,000 affordable rental units over the
next five years. Additional rental assistance is an important complement to these programs, to ensure that
all HOME and tax credit housing is affordable to even the lowest income households.
Congress is also considering legislation that will determine the income levels of households who
will be admitted to public housing and be provided Section 8 rental assistance. The Clinton administration
and HUD strongly support the transformation of public and assisted housing developments into healthier,
mixed-income communities. But policymakers must be careful not to exclude poor families altogether
from these housing developments, nor to increase by Federal policy the numbers of families with worst
case needs. This report shows that mixed-income communities can be achieved while still continuing to
serve families who are working but who have low incomes and serious housing needs.
I look forward to working with the Congress to try to reverse the disturbing trends documented in
this report.
Sincerely,
Adred
Andrew Cuomo
Enclosure
RENTAL HOUSING
ASSISTANCE-
THE CRISIS
CONTINUES
The 1997 Report to Congress on
Worst Case Housing Needs
April 1998
Office of Policy Development and Research
U.S. Department of Housing and Urban Development
Analysts contributing to this report are Kathryn P. Nelson, Jill Khadduri,
Marge Martin, Mark D. Shroder, and Barry L. Steffen
Table of Contents
Executive Summary
ix
Chapter 1: Introduction
1
Terms and Sources
1
Building the Report
2
Chapter 2: Findings
9
Major Findings
Finding 1: Despite robust economic growth between 1993 and 1995, the
number of very-low-income renters with worst case housing needs
remained at an all-time high-5.3 million
9
Finding 2: The stock of rental housing affordable to the lowest income
families is shrinking and Congress has eliminated funding for new rental
assistance since 1995
11
Finding 3: The fastest growth in worst case needs in the 1990s
was among working families
14
Finding 4: One of every three households with worst case needs
now lives in the suburbs
18
Supplementary Findings
Finding 5: The most serious housing needs are concentrated among
households with the lowest incomes
21
Finding 6: Of the 12.5 million persons in households with worst case
needs. almost 1.5 million are elderly and 4.5 million are children. The
number of adults with disabilities in households with worst case needs
is estimated between 1.1 and 1.4 million
30
Finding 7: Worst case needs continue to shift to the West
34
Chapter 3: Policy Implications
37
Appendix A: Data on Housing Problems
A-1
Appendix B: Glossary
B-1
Appendix C: Procedures Used To Estimate Housing Needs From American
Housing Survey Data
C-1
V
Exhibits
Exhibit 1:
Income Categories Used in Housing Programs
3
Exhibit 2:
Extremely Low, Very Low, and Low Income: Examples of 1997 Income
Limits for Four-Person Households
4
Exhibit 3:
Housing Assistance and Affordable Housing Programs
5
Exhibit 4:
Household-Level Data From HUD Programs
6
Exhibit 5:
Changes to Assisted Housing Policy: Recent and Proposed
7
Exhibit 6:
Worst Case Needs Dropped in the Mid-1980s, but
Not in the 1993-1995 Recovery
10
Exhibit 7:
Annual Increase in the Number of Households With Public
and Assisted Housing, 1978-1996
10
Exhibit 8:
Loss of Private Market Units Affordable for Very-Low-Income
Renters Accelerated Between 1993 and 1995
12
Exhibit 9:
Mismatches Between Extremely-Low-Income Renters and
Rental Units They Can Afford Continue to Worsen
13
Exhibit 10:
Between 1991 and 1995, Growth in Worst Case Needs Was
Highest Among Working Families and Individuals
15
Exhibit 11:
Substantial Numbers of Very-Low-Income Families
With Children Are Working
15
Exhibit 12:
Over 1.6 Million Unassisted Working Renters With Worst
Case Needs Have Extremely Low Incomes
16
Exhibit 13:
Many Assisted Families Have Earnings as Their Primary
Source of Income
17
Exhibit 14:
In the Early 1990s Worst Case Needs Grew Quickly
in the Suburbs
19
Exhibit 15:
Mismatches Between Extremely-Low-Income Renters and
Available Rental Units They Can Afford are Worst in the Suburbs
20
vi
Exhibit 16:
Over Two-Thirds of Renters With Priority Problems Have Income
Below 30 Percent of Median
21
Exhibit 17:
Renters With Income Below 30 Percent of Median Are the Only
Groups Likely to Have Severe Housing Problems
23
Exhibit 18:
Housing Assistance Is Well Targeted to the Income Groups
With Priority Problems
24
Exhibit 19:
History of the Federal Preference System
25
Exhibit 20:
Some Public Housing Projects Exclude the Poor
27
Exhibit 21:
The HOME Program Serves Extremely-Low-Income Households
at Affordable Rents, Especially When Combined With Tenant-Based
Rental Assistance
29
Exhibit 22:
Designated Housing
30
Exhibit 23:
Worst Case Needs by Household Type, 1995
32
Exhibit 24:
Priority Problems Concentrate in the Poorest Households of
Each Family Type
33
Exhibit 25:
Western Renters Are Underserved Relative to Needs
35
Exhibit 26:
Mismatches Between Extremely-Low-Income Renters and Available
Rental Units They Can Afford are Worst in the West
36
vii
Executive Summary
This Congressionally mandated report documents four major findings:
The persistence of a housing affordability crisis for very-low-income renters despite the
robust economic growth of the 1990s.
A reduction in the stock of affordable rental housing and the elimination of new Federal
rental assistance, beginning in 1995.
A sharp increase in needs for rental housing assistance among the working poor.
The increased suburbanization of housing needs.
These findings have significant implications for Federal housing policy. To begin to ameliorate
this severe housing crisis, Congress should resume the expansion of Federal tenant-based rental
assistance targeted to those with the most severe needs. In addition, Congress should expand
programs like HOME and the Low Income Housing Tax Credit which subsidize the construction
and rehabilitation of affordable rental housing. Finally, Congress should to the maximum extent
possible continue to focus scarce Federal public and assisted housing opportunities on those
households with the most severe housing needs, while still fostering a greater income mix in
public and assisted housing developments.
Major Findings
Finding 1:
Despite robust economic growth between 1993 and 1995, the number of very-
low-income renters with worst case housing needs remained at an all-time
high-5.3 million.
In 1995, 5.3 million very-low-income renters without housing assistance paid over half their
income for housing or lived in severely substandard housing. 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. Renters with
incomes below 50 percent of area median income are called "very-low-income" renters.
Households with the lowest incomes are most likely to have worst case needs. Almost
70 percent of unassisted renters with extremely low incomes had worst case housing needs in
1995. In this report, renters with incomes below 30 percent of area median income are called
"extremely-low-income" renters. Nationally, 30 percent of median income approximates the
poverty level, but the definition of extremely low income is adjusted for geographical differ-
ences. As a national average in 1998, "extremely low income" means less than $13,590 for a
family of four or less than $10,872 for a two-person family.
ix
Finding 2:
The stock of rental housing affordable to the lowest income families is shrink-
ing, and Congress has eliminated funding for new rental assistance since 1995.
Between 1993 and 1995, there was a loss of 900,000 rental units affordable to very-low-income
families, a reduction of 9 percent. There was an even greater reduction-16 percent-in the
number of units affordable for "extremely-low-income" renters.
Federal housing policy has done little to ameliorate these problems. Since 1995, Congress
has denied Administration requests for new rental assistance and ceased funding for new
incremental rental assistance to serve families with worst case needs. This is a historic rever-
sal of Federal housing policy, which had continuously expanded Federal rental assistance in
every year prior to 1995. From 1978 through 1982, an average of 224,000 additional house-
holds were provided Federal rental assistance each year. The average number of new house-
holds getting assistance dropped to approximately 146,000 during the 1980s and early 1990s.
Finding 3: The fastest growth in worst case needs in the 1990s was among working
families.
Full-time work should provide a family with an income sufficient to afford a decent place to
live. In fact, having a low-paid job is increasingly unlikely to lift a family out of poverty or
resolve worst case housing needs. Between 1991 and 1995, worst case needs rose by
265,000, or 24 percent, for renters with annual earnings of at least one full-time worker at the
minimum wage. By 1995, there were 1.4 million such households with worst case needs.
Finding 4:
One of every three households with worst case needs now lives in the suburbs.
While the greatest numbers of worst case needs are in central cities, a large and fast-growing
number live in the suburbs. The first half of the 1990s saw a suburbanization of worst case
needs as more than 1.8 million of the 5.3 million households with worst case needs-or one
of every three-lived in the suburbs in 1995. Suburban worst case needs grew by 9 percent
from 1991 to 1995.
Supplementary Findings
Finding 5: The most serious housing needs are concentrated among households with
the lowest incomes.
Almost 4 million of the 5.3 million households with worst case needs have extremely low
incomes-below 30 percent of median. Almost 7 of every 10 such households pay more than
one-half their income for rent or live in severely inadequate housing when they are not assisted.
The frequency of worst case needs declines sharply as income rises. Only 26 percent of
unassisted renters with incomes between 31 and 50 percent of median have worst case needs
and fewer than 5 percent of renters with incomes between 51 and 80 percent of median experi-
ence such problems.
X
Finding 6:
Of the 12.5 million persons in households with worst case needs, almost 1.5
million are elderly and 4.5 million are children. The number of adults with
disabilities in households with worst case needs is estimated between 1.1 and
1.4 million.
From 1993 to 1995, there was a surge in the number of very-low-income single individuals
who are not elderly, even as the overall number of very-low-income households declined
slightly. Importantly, the likelihood of having worst case needs also grew among non-elderly
singles. Although the American Housing Survey does not measure disabilities directly, many
of these individuals with worst case needs have disabilities.
It is clear that both single individuals with disabilities and other households with a disabled
member face substantial and growing housing problems. The number of adults with disabilities
living in households with worst case needs is estimated at between 1.1 and 1.4 million in 1995.
More than 2.1 million families with children had worst case problems in 1995. Among the
2.1 million families with children who had worst case problems, 930,000 had income from
either Aid to Families with Dependent Children (AFDC) or Supplemental Security Income
(SSI).
More than 1 million elderly households had worst case problems in 1995.
Finding 7:
Worst case needs continue to shift to the West.
The number of very-low-income renters in the West continued to increase between 1993 and
1995, while dropping in other regions. The West had the highest percentage of very-low-
income renters with acute housing needs, 42 percent, compared with 32 percent in the South,
33 percent in the Midwest, and 39 percent in the Northeast. The result is that the number of
Western households with worst case needs reached a record 1.56 million in 1995.
The mismatch between available extremely-low-rent units and extremely-low-income renters
is large and getting larger in all four census regions. Shortages are worst in the West, how-
ever, where in 1995 for every 100 extremely-low-income renters there were only 31 units that
were either already occupied by extremely-low-income renters or vacant and for rent, com-
pared with the nationwide figure of 44 units per 100 renters.
Policy Implications
The findings of this report suggest that economic growth alone will not ameliorate the record-
level housing needs among families with limited incomes. Not even families working full-time at
the minimum wage can afford decent quality housing in the private rental market. The report also
makes it clear that housing needs are not just found in big cities but increasingly in the suburbs
as well.
xi
The report suggests a clear and compelling need for the Congress to provide greater support for
Federal housing assistance-by expanding both tenant-based rental assistance and programs that
create and rehabilitate more affordable housing units. And Congress should act carefully in
reforming the income targeting rules for public and assisted housing programs to balance the
goals of achieving a greater income mix in public and assisted housing developments and provid-
ing assistance to families with the most severe housing needs.
New Housing Assistance
103,000 New Vouchers: The Administration has asked Congress to fund 103,000 new hous-
ing assistance vouchers, including 50,000 welfare-to-work vouchers to help welfare recipi-
ents get and keep jobs. This report documents the need for those vouchers to reduce the
overall number of families and individuals with worst case needs and to provide the portable
housing assistance critical for a successful transition to work.
Ending the Delay on Reissuing Vouchers: Congress should end immediately its cost-saving
requirement placed on local housing authorities to hold for three months rental subsidies
returned by families leaving the program. This practice reduces by 40,000 the number of
subsidies in circulation and thus the number of families receiving housing assistance.
Expanding Production of Affordable Housing Through HOME and the Low Income
Housing Tax Credit: The Administration is also seeking to expand tools to build and reha-
bilitate affordable housing. HUD's FY 1999 budget includes increased funding for the
HOME program, along with a new HOME Bank, a loan guarantee feature that would allow
communities to leverage up to five times their Federal grants for larger scale housing invest-
ments. In addition, the Administration is proposing a substantial expansion of the Low
Income Housing Tax Credit that would create 180,000 new affordable rental units over the
next five years.
Careful Income Targeting of Federal Housing Assistance
Congress is considering legislation that will determine the income levels of households who will
be admitted to public housing and to receive Section 8 rental assistance. The Clinton administra-
tion and U.S. Department of Housing and Urban Development (HUD) strongly support the
transformation of public and assisted housing developments into healthier, mixed-income com-
munities. But policymakers must be careful not to exclude poor families altogether from these
housing developments, nor to reduce unnecessarily the numbers of families with worst case
needs who can be served by Federal housing programs. This report shows that this goal can be
achieved while still continuing to serve families who are working but who have low incomes and
serious housing needs.
The body of the report is presented in three parts. The introduction (chapter 1) explains the back-
ground and approach of this report. Chapter 2 summarizes statistical data from HUD analyses of
worst case needs, documenting major findings. Chapter 3 explores the implications of the find-
ings for current policy decisions. Appendices provide detailed definitions and statistical tables.
xii
Chapter 1
Introduction
Since the early 1990s, the U.S. Department of Housing and Urban Development (HUD) has
submitted regular formal reports to Congress on worst case needs for rental housing assistance.
These reports have drawn on data collected by the Bureau of the Census, U.S. Department of
Commerce, in the American Housing Survey (AHS) and in the decennial censuses. The 1996
report, Rental Housing Assistance at a Crossroads, for the first time also included information
from HUD administrative data about how well current housing assistance programs are serving
families and individuals that otherwise would have worst case needs.¹
Terms and Sources
HUD has used a consistent definition of worst case needs, making it possible to track changes
over time. This definition is based on (1) income limits that determine eligibility for Federal
housing assistance and (2) "priority housing problems" (see appendix B, Glossary).
This report uses the terms "acute housing needs" and "worst case needs" interchangeably to refer
to households that:
Are renters.
Do not receive Federal housing assistance.
Have incomes below 50 percent of median family income in their area, as
established by HUD.
Pay more than one-half of their income for rent and utilities or live in severely
substandard housing-until recently, households on waiting lists with either of
these characteristics received preference for rental assistance programs.²
The basic source of information for analyzing the U.S. housing stock and the housing needs of
U.S. households is the American Housing Survey. AHS is conducted for HUD by the Bureau of
the Census, which completes about 45,000 interviews of occupied households in a biennial
national sample of housing units. Smaller samples of units in 47 large metropolitan areas are
surveyed on 4- to 6-year cycles.
1.
In 1990, the Senate Appropriations Committee directed HUD to "resume the annual compilation of a worst case housing
needs survey of the United States." HUD had reported worst case housing needs to Congress during the 1980s on an
informal basis, following a request from the Chair of the HUD Subcommittee of the Senate Appropriations Committee.
2.
Although "substandard" housing should include homelessness, the homeless are omitted from this report's counts of worst
case needs because the AHS surveys and counts only persons in housing units. For a history of the Federal preferences, see
exhibit 19, "History of the Federal Preference System." on page 27 of this report.
1
HUD's first formal report to Congress on worst case needs in 1991 was based on 1989's AHS.
The second report in 1992 continued to use 1989 AHS data for the Nation, augmented with
information on worst case needs from the metropolitan surveys. In 1994, HUD based its report
on data from the 1991 AHS and the 1990 Decennial Census.
The 1996 report was based on data from the 1993 AHS and, for the first time, included adminis-
trative data on the characteristics of households participating in the public housing and Section 8
programs. The 1996 report also included analyses of data from the Social Security Administra-
tion (SSA) to better understand the housing needs of persons with disabilities and their participa-
tion in HUD programs. Finally, that report reanalyzed and refined earlier AHS data to more
reliably track growth in the number of households with worst case housing needs between 1978
and 1993.³
Building the Report
This year's report uses data from the 1995 AHS and HUD administrative data as of January
1997. It builds on the 1996 report in the following ways:
Detailed income categories are used to examine the housing needs of households. Like
the 1996 report, this report distinguishes among extremely-low-income households (those
with incomes below 30 percent of median income), other very-low-income households (those
with incomes between 31 and 50 percent of median income), and other low-income
households (those with incomes between 51 and 80 percent of median income).
The extremely-low-income category has become particularly important. Legislation under
consideration since 1995 would replace the waiting list preference for worst case needs
households by targeting assistance to those below 30 percent of area median income.
As shown by this and earlier worst case needs reports, households with incomes below
30 percent of median are those most likely to have worst case needs.
3. HUD's previous reports to Congress are Priority Problems and "Worst Case" Needs in 1989 (June 1991, HUD-1314-PDR),
The Location of Worst Case Needs in the Late 1980s (December 1992, HUD-1387-PDR), Worst Case Needs for Housing
Assistance in the United States in 1990 and 1991 (June 1994, HUD-1481-PDR), and Rental Housing Assistance at a
Crossroads: A Report to Congress on Worst Case Housing Needs (March 1996). Both the June 1994 and March 1996 reports
are available online at http://www.huduser.org under the Publications heading.
2
Exhibit 1
Income Categories Used in Housing Programs
For many HUD programs and housing programs administered by other Federal agencies, eligibility
is restricted to households whose incomes do not exceed a specific percentage of the median family
income for the area in which the household lives. HUD defines median income for each metropolitan
area and non-metropolitan county, and the HUD-adjusted area median family income (HAMFI) varies
by location and household size."
In contrast, poverty status is determined by comparing income with national poverty thresholds that
vary only by household size but not location. Because HUD's income limits vary with location and use
smaller adjustments for household size, they cannot be compared directly with the Federal poverty line.
Averaged across the United States, however, poverty thresholds correspond approximately with 30
percent of area median income.
The number of households below a specified percentage of HUD's area median income is not related
to any break on the total income distribution, such as quintiles or deciles. For example, almost one-half
(45 percent) of all U.S. households and 64 percent of all renters have incomes below 80 percent of their
area median income. More than 26 percent of all U.S. households have incomes less than 50 percent of
area median income.
The upper limits of income categories used in housing programs and in this report are as follows:
80 percent of area median income. Defined as lower income by the U.S. Housing Act and used for
many rental and homeownership programs.
60 percent of area median income. Used in Low Income Housing Tax Credit and HOME programs.
50 percent of area median income. Defined as very low income by the U.S. Housing Act and used
for many rental programs.
30 percent of area median income. Defined as extremely low income in pending housing authoriza-
tion bills. Used as a proxy for households that, until 1995, would have received a Federal preference
for rental housing assistance because they have worst case housing needs.
The table below shows how many U.S. renter households fell into the different income groups relevant
for housing programs in 1995. To suggest the overlap between the HUD income groups and poverty, it
also shows the share of each income group whose cash income fell below the poverty line or below
150 percent of the poverty line, which is the approximate eligibility cutoff for the U.S. Department of
Agriculture Food Stamp program. As in this exhibit, this report frequently refers to specific income
groups as ranges of percentages of area median income because official terms are so complex. For
example, incomes 51-80 percent of area median are officially "low but not very low" incomes.
Exhibit 2 gives examples of HUD income cutoffs for nine large metropolitan areas.
Percent Share of Households
Income as % of HUD-Adjusted
Share of
in Group With Income
Area Median Family
U.S. Renters
Below the
Below 150% of
Income (HAMFI)
1995 (%)
Poverty Level
the Poverty Level
0-30
25
86
99
31-50
17
15
64
51-60
8
0
19
61-80
13
0
4
*Appendix B discusses other adjustments.
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
3
Exhibit 2
Extremely Low, Very Low, and Low Income:
Examples of 1997 Income Limits for Four-Person Households
Extremely
Very Low
Low Income
Income
Low Income
(30 percent
(50 percent
(80 percent
Area
of median)
of median)
of median)*
Median
Los Angeles
$15,400
$25,650
$41,050
$47,800
New York
$14,700
$24,500
$39,200
$47,300
Chicago
$16,750
$27,900
$43,500
$55,800
Philadelphia
$15,400
$25,650
$41,050
$51,300
Detroit
$16,000
$26,650
$42,650
$53,330
Washington, DC
$21,100
$35,150
$43,500
$70,300
Boston
$17,900
$29,800
$43,500
$59,600
Houston
$14,750
$24,550
$39,300
$49,100
Atlanta
$15,950
$26,550
$42,500
$53,100
In 1997, the average poverty threshold for a family of four was $16,400.
The "80 percent of median" limits for each area cannot exceed the national median of $43,500.
Source: HUD Section 8 income limits, fiscal year 1997
4
Exhibit 3
Housing Assistance and Affordable Housing Programs
Federal rental assistance programs operate in three basic ways:
Public housing. These units are owned by local public agencies. From 1937 to the mid-1980s,
public housing was used extensively to produce additional assisted housing units. Today, there
are 1.2 million occupied units of public housing.
Project-based assisted housing. These programs supported the construction and rehabilitation
of 1.4 million rental units for low-income households. Deep rent subsidies are attached to
projects owned by for-profit and nonprofit sponsors that must rent units to eligible households.
These programs added large numbers of assisted units from 1974 to the early 1980s.
Tenant-based assisted housing. These programs provide direct rental assistance to 1.4 million
renter households to enable them to find their own housing on the open market. The maximum
subsidy is the difference between the tenant contribution and the local fair market rent (FMR),
an average rent for standard quality housing in the area. Begun in 1974, this type of assistance
has accounted for virtually all the incremental units, or additions to assisted housing, since the
mid-1980s.
In all three types of programs, assisted households pay rents that are a percentage of their adjusted
income-usually 30 percent. This formula allows even the poorest households to live in assisted
housing.
Other Federal programs produce affordable housing. There are a number of other Federal
housing programs in which renters are charged fixed or flat rents, with the maximum determined
by program rules. Households pay the established rent rather than a percentage of their income.
Without an additional subsidy, the poorest households often cannot afford this housing. These
programs include:
The Low Income Housing Tax Credit program. This tax credit program subsidizes the capital
costs of units that must bear rents affordable to households with incomes at or below 60 percent
of area median income. HUD estimates that this program has produced more than 600,000 units
since its enactment in 1986.4
The HOME Investment Partnership (HOME) program. This is a formula grant to States
and local governments that can be used to assist existing homeowners, first-time homebuyers,
or renters. Between 1992 and September 1997, HOME produced 126,000 affordable rental
units. Qualifying rents must be affordable to households with incomes at or below 65 percent
of area median income, or below local FMRs.
Older rental subsidy programs. The Section 221(d)(3) below market interest rate (BMIR)
program and the Section 236 program were active from the early 1960s through the early
1970s. They were designed to produce housing affordable by families with incomes above
the public housing income limits. Over time many projects or portions of projects in these
programs became "project-based assisted housing" rather than "rental subsidy" as deep rental
subsidies were attached to the units. There remain 300,000 units subsidized by these older
programs that do not have deep rental subsidies.
4.
Estimate assumes 100,000 units placed into service in 1996 and 1997.
5
Exhibit 4
Household-Level Data From HUD Programs
The Multifamily Tenant Characteristics System (MTCS) is an automated data base of households
assisted by public housing and the tenant-based Section 8 certificate and voucher programs and
other programs administered by HUD's Office of Public and Indian Housing. The system contains
information about the demographic characteristics of each household, the level and sources of the
household's income, and the address of the housing unit. The information is based on the form used
by public housing authorities (PHAs) to calculate each household's rent and subsidy levels. As of
February 1997, the system contained nearly 2.4 million household records, or about 85 percent of
the possible total.
The Tenant Rental Assistance Certification System (TRACS) is a similar system for households
assisted in project-based Section 8 programs and other assisted projects administered by HUD's
Office of Housing. Information in TRACS is based on forms completed by the private owner or
manager of the project and submitted to HUD. As of June 1997, TRACS contained 1.6 million
household records.
Tables providing additional information from MTCS and TRACS data on the income levels of
assisted households can be found in Recent Research Results, published by HUD's Office of Policy
Development and Research (PD&R) in March 1998 or at http://www.huduser.org under "publica-
tions." For data from MTCS and TRACS summarized for each housing project and each census
tract, see A Picture of Subsidized Households, published by PD&R in 1996 and 1997 (http://
www.huduser.org/data/picture.html). These reports provide income and demographic information
at the census tract and project level, along with national and regional reports, based on HUD's
administrative records.
Another source of information on households receiving Federal housing assistance is:
Characteristics of HUD-Assisted Renters and Their Units in 1993, published by PD&R in May
1997. This report is based on case-by-case matching of administrative data on the addresses of
assisted housing units to AHS data.
The most recent information from HUD administrative records is used to show how
rental assistance programs serve different income and demographic groups. The 1996
report used data from the Multifamily Tenant Characteristics System (MTCS) and the Tenant
Rental Assistance Certification System (TRACS) as of December 1995. This report uses
MTCS and TRACS data from February 1997.
Data from SSA are used to better describe the housing needs of persons with disabilities
and their participation in HUD programs. Because AHS does not specifically ask about
disabilities, worst case needs reports published before 1996 identified people with disabilities
by assuming that anyone under the age of 62 who reported receiving Supplemental Security
Income (SSI) had a disability.⁵ The 1996 report used data from an audit of the SSI program to
5. AHS supplemental questions on disabilities were included in the 1978 and 1995 national surveys, but these questions cover
only physical disabilities.
6
develop much more complete estimates of the number of worst case needs households with
members who have disabilities. This report does not update the analysis of SSA data, but uses
proportional relationships from the 1996 report to estimate the number of households with
disabilities and worst case needs in 1995.
1995 AHS national data are used to update the evidence of mismatches between very-
low-income renters and the availability of units affordable to them. In addition, a
separate report, to be published shortly by PD&R, provides the detailed results and policy
implications of a major study of gains and losses in affordable housing units in
41 metropolitan areas.
The policy outlook is still uncertain. The 1996 report was titled Rental Housing Assistance
at a Crossroads because Congress had begun to make major changes in housing assistance
policy that could result in public and assisted housing serving many fewer families and
individuals who otherwise would be categorized with worst case needs. This report is titled
Rental Housing Assistance-The Crisis Continues, because it supplies evidence that worst
case needs do not decline in an economic expansion, but also because the turmoil in housing
assistance policy is still under way (see exhibit 5).
A new dimension has been added to the uncertainty in housing assistance policy by the major
overhaul of the Nation's welfare system. A year and a half after the enactment of welfare reform,
uncertainty exists about its effects on the incomes of poor families with children and other
categories of households affected.
Exhibit 5
Changes to Assisted Housing Policy: Recent and Proposed
Appropriations Actions
HUD's Appropriations Acts since 1996 have included the following measures:
No funds for incremental rental housing assistance. Funds are provided only for the replacement of
public and assisted housing units that leave the assisted housing stock, for other circumstances in
which families and individuals who already have housing assistance need to be protected, or for
very limited special purposes such as litigation settlements.
Year-to-year suspension of the Federal preferences for public and assisted housing that target
assistance to households with worst case housing needs, without changes substituting income
targeting requirements.
A required delay in the reissuance of tenant-based assistance by housing authorities when house-
holds leave the program that, in effect, shrinks the number of households assisted at any one time.
continued on page 8
7
Changes to Assisted Housing Policy: Recent and Proposed (continued)
Authorization Actions
Congress is considering new enabling legislation for public housing and tenant-based housing assis-
tance. Provisions of this legislation would permanently end Federal preferences for households with
worst case housing needs.
Senate Bill S. 462, passed by the Senate in September 1997, would eliminate Federal preferences
permanently and require a minimum of 40 percent of households newly admitted to public housing
and 65 percent of households admitted to tenant-based rental assistance programs to have incomes
below 30 percent of the area median. Seventy percent of households newly admitted to public
housing and 90 percent of households admitted to tenant-based rental assistance would be required
to have incomes below 60 percent of median. This would mean that 30 percent of households
newly admitted to public housing and 10 percent of households newly admitted to tenant-based
rental assistance programs could have incomes as high as 80 percent of area median income.
House Bill H.R. 2, passed by the House of Representatives on May 14, 1997, would eliminate
Federal preferences and require a minimum of 35 percent of households newly admitted to public
housing to have incomes below 30 percent of area median income. Forty percent of households
newly admitted to the tenant-based Section 8 program would have to have incomes below 30
percent of median. This would mean that 65 percent of households admitted to public housing and
60 percent of households newly receiving tenant-based Section 8 assistance could have incomes of
up to 80 percent of the area median. If a public housing authority (PHA) exceeded the extremely-
low-income targeting requirement for Section 8 tenant-based assistance, the public housing
targeting requirements could be reduced by the amount of excess in targeting Section 8 tenant-
based assistance. Thus, it would be possible for a PHA not to admit any extremely-low-income
households to its public housing.
The Clinton administration's position, reflected in H.R. 1447 and S. 784, would eliminate Federal
preferences and require a minimum of 40 percent of families newly admitted to public housing and
75 percent of families newly admitted to tenant-based assistance programs to have incomes below
30 percent of median. For public housing, at least 90 percent of newly admitted households would
be required to have incomes below 60 percent of median, while the remaining 10 percent could
have incomes up to 80 percent of median. For Section 8 tenant-based assistance, the remaining 25
percent of newly admitted families would have to have incomes below 50 percent of the area
median.
The Administration-supported bills also would require that at least 40 percent of the units in each
public housing project be occupied by families with incomes not exceeding 30 percent of median,
ensuring that some extremely-low-income individuals and households would be served in all
projects, including the most desirable projects.
8
Chapter 2
Major Findings
Acute needs for housing assistance, at an all-time high in 1993, did not drop between 1993 and
1995 despite the strong, sustained economic growth experienced during that period. In 1995, as
in 1993, more than 5.3 million very-low-income renter households-almost 12.5 million indi-
viduals-paid more than one-half of their income for housing or lived in poor-quality housing.
Among very-low-income renters, the share with worst case needs rose very slightly, to 37 per-
cent.¹ These 5.3 million households represent 4.9 percent of the Nation's population and over
one-seventh of all U.S. renters. Without Federal housing assistance, they lack the income to
afford adequate, market-rate housing. One missed paycheck, an unexpected medical bill, or some
other emergency is all that separates many of these families from homelessness.
Finding 1:
Despite robust economic growth between 1993 and 1995, the number of
very-low-income renters with worst case housing needs remained at an
all-time high-5.3 million.
In the economic expansion of the mid-1980s, the number of households with worst
case needs declined. No comparable drop occurred between 1993 and 1995, when
housing assistance was no longer increasing each year.
During the economic expansion of the mid-1980s, worst case needs dropped significantly be-
tween 1985 and 1987 (see exhibit 6). Between 1993 and 1995, economic growth brought greater
declines in both poverty and unemployment rates than had occurred between 1985 and 1987.
Unemployment dropped from 6.8 percent in 1993 to 5.6 percent in 1995, whereas the 1985-1987
decline in unemployment was from 7.2 to 6.2 percent. The poverty rate dropped from 15.1
percent in 1993 to 13.8 percent in 1995, whereas the 1985-1987 decline in poverty was from
14.0 percent to 13.4 percent.² In light of the strong 1993-1995 economic growth, the absence of
a decline in needs between 1993 and 1995 is both surprising and discouraging.
Part of the explanation for the different pattern of worst case needs between 1985 and 1987 and
1993 and 1995 may be that the mid-1980s was a period of continued rapid growth in housing
assistance (see exhibit 7), whereas the mid-1990s was not. Housing developments funded by
production programs in the late 1970s and affordable by the poorest households were completed
and occupied in the mid-1980s.³ In addition, Congress then was adding about 100,000 incremen-
tal units of tenant-based rental assistance each year.
1.
A slight decline from 5.34 million worst case households in 1993 to 5.32 million in 1995 is statistically insignificant.
Despite a modest decline of about 200,000 in the number of households whose incomes fell below 50 percent of the area
median, among very-low-income renters, the share with worst case needs increased slightly and insignificantly, from 36.3 to
36.53 percent.
2.
Bureau of the Census. Current Population Reports, Series P-60, Nos. 184 and 188.
3.
Public housing and Section 8 new construction units are affordable by the poorest households because rent is set at 30
percent of the actual income of the households.
9
Exhibit 6
Worst Case Needs Dropped in the Mid-1980s, but Not in the 1993-1995 Recovery
6
(5.320)
5
4
Millions of Households
3
2
1
0
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
All Worst Case Households (1980 Weights)
All Worst Case Households (1990 Weights)
Source: HUD-PD&R tabulations from the Annual and American Housing Surveys
Exhibit 7
Annual Increase in Number of Households
With Public and Assisted Housing, 1978-1996
350
308
300
254
257
250
241
233
Thousands of Assisted Renters
198
200
187
177
171
150
117
121
125
111
106
113
111
98
100
67
50
-8
0
-50
'78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Source: Congressional Budget Office; based on congressional justifications from the U.S. Department
of Housing and Urban Development
10
The failure of worst case needs to ameliorate during the economic expansion of the 1990s dem-
onstrates that acute housing needs are a persistent problem in American society that cannot be
solved through overall management of the economy. An explicit Federal housing policy response
is needed.
For as long as worst case needs have been reported, affordability rather than housing quality has
been the predominant problem facing unassisted renters. In 1995, more than 95 percent of those
households with worst case problems paid more than one-half of their reported income for
housing. The proportion of worst case households living in housing with severe physical prob-
lems continued to drop, falling below 8 percent in 1995.
Reversing earlier declines, the incidence of overcrowding rose slightly between 1993 and 1995,
both among all renters (from 4.4 to 4.9 percent) and among very-low-income renters (from 6.8 to
7.9 percent). However, overcrowding is not included in estimates of worst case needs in this or
previous reports to Congress because it did not automatically give a household a Federal prefer-
ence for admission to assisted housing programs. Despite the slight increase in crowding, severe
rent burdens were the only housing problem for almost four of five worst case households
(79 percent).
Finding 2:
The stock of rental housing affordable to the lowest income families is shrink-
ing and Congress has eliminated funding for new rental assistance since 1995.
HUD's 1996 report to Congress on worst case housing needs demonstrated a serious mismatch
between numbers of extremely-low-income renters and numbers of units affordable to them as of
1993. This mismatch worsened markedly in just 2 years.
There were sharp losses in rental units for very-low-income renters.
Between 1993 and 1995, losses of private market rental units affordable to very-low-income
renters-that is, units on which a family with income at 50 percent of median would spend
30 percent of income or less-accelerated greatly. Between 1993 and 1995, the number of units
affordable to very-low-income renters dropped by almost 900,000, from just under 10.4 million
to 9.5 million units (see exhibit 8).
This drop in very-low-rent units was almost four times greater than the decline in very-low-
income renters. The number of very-low-income renters dropped slightly, by 229,000, between
1993 and 1995.
The gap between the lowest income renters and units affordable to them is large and
growing.
The largest losses of private rental stock, in percentage terms, were for units with rents affordable
to extremely-low-income renters, those on which a family with income at 30 percent of median
would spend 30 percent of income or less. The number of extremely-low-rent private market
units dropped from 1.8 million in 1993 to 1.5 million in 1995, a 16-percent loss in just 2 years.
11
Exhibit 8
Loss of Private Market Units Affordable for Very-Low-Income
Renters Accelerated Between 1993 and 1995
12
10.392
10.372
10
9.481
8
Millions of Rental Units
6
8.524
8.559
7.950
4
2
1.868
1.813
1.531
0
1991
1993
1995
Extremely-Low-Rent Units
Very-Low-Rent Units
Source: HUD-PD&R tabulations from the 1991, 1993, and 1995 American Housing Surveys
The gap between the number of extremely-low-income renters and the number of extremely-low-
rent housing units continued to get worse. By 1995, for every 100 extremely-low-income renters
there were only 77 units with rents that would have been affordable had those units been avail-
able to them. By comparison, there were 111 affordable units for every 100 renters with incomes
below 50 percent of area median income.
Not all these extremely-low-rent units were rented by the lowest income renters. Many of these
units were occupied by households with incomes greater than 30 percent of median. When only
those units either vacant and for rent or already occupied by extremely-low-income renters are
considered available, there were only 44 units per 100 households in 1995. This ratio has
dropped steadily during the 1990s (see exhibit 9).
Another indication that the private housing market does not supply rental units affordable to the
lowest income families is that more than three quarters of the extremely-low-rent units occupied
by households at any income level were "non-market" units. These include public and assisted
housing, other housing with publicly subsidized rents, and units for which the occupant did not
pay a cash rent.
12
Exhibit 9
Mismatches Between Extremely-Low-Income Renters and
Rental Units They Can Afford Continue to Worsen
100
89
85
80
80
77
Extremely-Low-Rent Units Per 100
Extremely-Low-Income Renters
60
48
47
46
44
40
20
0
All Affordable Units
Available Units
1989
1991
1993
&
1995
Source: HUD-PD&R tabulations from the 1989, 1991, 1993, and 1995 American Housing Surveys
In a historic reversal of Federal housing policy, Congress has stopped providing fund-
ing to expand rental assistance for households with worst case needs.
The Federal Government began its commitment to providing low-income renters with decent
quality, affordable housing in response to the Great Depression in the 1930s. Since World War II,
there has been an uninterrupted growth in the number of households who have been provided
with Federal rental assistance through a variety of Federal construction, rehabilitation, and rental
assistance programs.
The growth in the numbers of households receiving rental assistance peaked in the late 1970s,
when more than 200,000 additional households were being added to the housing assistance rolls
each year. From 1978 through 1982, an average of 224,000 additional households were provided
Federal rental assistance each year. The average number of new households getting assistance
dropped to approximately 146,000 during the 1980s and early 1990s.
This trend ended abruptly in 1996, when for the first time, the number of renters receiving
Federal housing assistance actually dropped (see exhibit 7, page 10). Since 1995, Congress has
denied Administration requests and provided no funding for new rental assistance to serve
families with worst case needs.
13
Finding 3:
The fastest growth in worst case needs in the 1990s was among
working families.
The failure of worst case needs to drop despite a robust economy becomes more understandable
if one looks at the nature of the growth in worst case needs during a somewhat longer period of
time: 1991-1995. Underlying the growth in worst case needs in the early 1990s were structural
problems not alleviated-and even exacerbated-by the mid-1990s economic boom. These
problems included lags in wages for the lowest paid workers. Working poor families and indi-
viduals faced a diminishing supply of housing at rents they could afford, as people with stronger
income growth put upward pressures on rents.
Between 1991 and 1995, worst case needs among working families grew by 24 percent.
The share of all households experiencing worst case needs that had earnings at least
the equivalent of one full-time worker at minimum wage rose from 22 to 26 percent.
As very-low-income families enter the workforce, increases in income often are not enough to
make rents affordable and alleviate worst case housing needs. In fact, housing problems can be
even more vexing for very-low-income workers than for those who receive their income from
public assistance. Housing affordable to a family with low wages may be far from work. Finding
and renting in the right location to get and keep a job may mean spending so much for housing
that other needs go unmet. It may be impossible to keep up with the rent because of unexpected
expenses such as car repairs or specialized clothing for work. Missing rent payments and pos-
sible eviction is a serious concern just at the time when the family is coping with child care and
other new pressures associated with keeping a job.
Between 1991 and 1995, worst case needs overall rose from 4.9 million renter households to
5.3 million, a growth rate of 7 percent. For unassisted very-low-income renters with children in
the family and someone working the equivalent of at least full-time at minimum wage, worst
case needs rose at double that rate, or 13 percent (see exhibit 10). Renters without children
experienced the same pressures: Among those working at least full-time, worst case needs rose
by 37 percent. Together, these two groups of working households were 1.1 million, or 22 percent,
of renters with worst case needs in 1991 and grew to 1.4 million, or 26 percent, by 1995.
A family that moves to work as a result of welfare reform will likely still have worst case
needs for housing assistance.
The very-low-income threshold of 50 percent of the area median is at a level well above both the
poverty threshold and welfare benefit levels.4 Even extremely-low-income families-those with
incomes below 30 percent of median or roughly the poverty level-are as likely to be working as
4. In 1995, a family receiving the maximum Aid to Families with Dependent Children (AFDC) grant for a family of three
would have been at 16 percent of the area median income in New York City, 10 percent in Chicago, 5.5 percent in Houston,
and 16 percent in Los Angeles. It is not surprising that many families with incomes below 30 percent of the area median
receive no welfare.
14
Exhibit 10
Between 1991 and 1995, Growth in Worst Case Needs Was
Highest Among Working Families and Individuals
Worst Case Needs
in 1995 (Thousands)
Change 1991-1995
Percent Change
All Households
5,320
370
7%
Working*
1,374
265
24%
Families With Children
660
73
13%
Households Without Children**
714
191
37%
Not Working
2,650
180
7%
Families With Children
1,446
10
1%
Households Without Children**
1,204
170
16%
Elderly
1,068
-55
-5%
*
Earnings exceed full-time work at minimum wage.
**Non-elderly and no disability (not reporting SSI income).
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
they are to be receiving income from public assistance (see exhibit 11). In the income group
between 21 and 30 percent of median, almost two-thirds of families with children have earnings
as their main income source and half are working the equivalent of full-time at minimum wage. It
is not surprising, then, that more than one-half of families with children and worst case housing
needs rely primarily on work to support themselves.
Exhibit 11
Substantial Numbers of Very-Low-Income Families With Children Are Working
Income as Percent of Area Median
0-20
21-30
31-50
51-60
61-80
Percent Reporting Earnings of:
$3,750+ (Half-Time at Minimum Wage)
17
68
90
97
97
$7,500+ (Full-Time at Minimum Wage)
5
50
85
96
96
$11,250+
1
22
72
91
95
Percent With Some AFDC/SSI Income
58
38
20
9
10
Percent With Earnings as Primary
27
63
86
95
94
Income Source
Total Working Families With Children
435
908
2,348
1,045
1,699
(in Thousands)
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
15
The Clinton administration strongly believes that those capable of working should do so and that
housing assistance should play a key role in rewarding work and family responsibility. Helping
families with worst case needs and rewarding work are not incompatible priorities. In 1995 more
than 1.6 million renters with worst case needs had incomes below 30 percent of the area median
and earnings as their primary income source (see exhibit 12). Proposed changes that would raise
income eligibility for Federal housing assistance could-in the name of helping low-income
workers-divert resources away from the working poor who most need assistance.
A very large number of the families that will go to work as a result of welfare reform will con-
tinue to have incomes below 30 percent of the area median. A recent study found that the median
annual income of families leaving welfare for work was just $5,000 in the first year and $9,000
after 5 years.⁵ These incomes are well below the national extremely-low-income cutoff of
$12,900. If a family is working yet has an extremely low income, that family will probably have
worst case housing needs. Two of every three unassisted extremely-low-income working families
with children have worst case needs.
Exhibit 12
Over 1.6 Million Unassisted Working Renters With
Worst Case Needs Have Extremely Low Incomes
900
874
800
727
Thousands of Non-Elderly Worst Case Households
700
With Earnings as Primary Income Source
600
500
485
400
329
300
200
100
0
0-30%
31-50%
0-30%
31-50%
Median
Median
Median
Median
Families With Children
Other Households With Heads Ages 18-61
Worst Case Households by Family Type and Income, 1995
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
5.
Daniel R. Meyer and Maria Cancia, Life After Welfare: The Economic Well-Being of Women and Children Following Exit
from AFDC, Institute for Research on Poverty, University of Wisconsin, Discussion Paper No. 1101-96, August 1996.
16
Current housing assistance programs effectively reach the working poor.
Housing assistance can be crucial to working poor families, helping them to stabilize their lives
and continue their climb out of poverty. Of the 4.3 million households living in public housing or
receiving assistance from one of the Section 8 programs, more than 1.1 million report earnings as
their primary source of income.⁶
Current housing assistance programs are well targeted, not just to workers but to the working
poor. Nearly one-half (48 percent) of assisted families with children who report incomes between
21 and 30 percent of median have earnings as their primary source of income. Even at the very
lowest income range (below 20 percent of median), almost one-fifth (18 percent) of all families
with children living in assisted housing have earnings as their primary income source. Work is
even more common among extremely-low-income households without children when that house-
hold is headed by an individual who is not elderly and does not have disabilities (see exhibit 13).
Exhibit 13
Many Assisted Families Have Earnings as Their Primary Source of Income
100
92%
88%
82%
80
76%
Percent With Earnings as Primary Source
60
53%
48%
40
34%
18%
20
0
Families With Children
Other Non-Disabled Households
With Heads Ages 18-62
Income as % of Area Median
0-20
21-30
31-50
51-60
Source: HUD-PD&R tabulations from 1997 program data (MTCS and TRACS)
6.
The difference between these 4.3 million units and the 4.5 million total HUD-assisted rental units occurs because Indian
housing and units in the Section 8 moderate rehabilitation program have not been included in the analysis for this report.
17
Housing assistance programs could be even more explicitly targeted to reward work. The Clinton
administration supports providing housing assistance to working families and to families prepar-
ing themselves for work through job training and education. This change is most critical in public
and assisted housing projects, where the growing children urgently need adult role models who
work and adhere to mainstream values of the society. To achieve this objective, however, it is not
necessary to serve families with incomes above 50 percent of median income. These families are
unlikely to have severe needs for housing assistance. Instead, housing authorities and managers
of privately owned assisted housing can design admission priorities that direct assistance to those
who work and have incomes within the very-low- and extremely-low-income ranges.
Finding 4: One of every three households with worst case needs now lives in the suburbs.
Because of higher poverty concentrations and lower homeownership rates, central cities have the
most renters with worst case needs. But surprising numbers of renters with worst case needs live
in the suburban portions of metropolitan America, and, except in the Northeast, that is where
worst case needs are growing the fastest. Moving from welfare to work may require access to the
suburbs-where approximately two-thirds of new jobs are being created-but for very-low-
income renters, paying suburban rents often means paying more than half of the family's income
for housing.
Nationwide, 1.8 million suburban renters had worst case needs in 1995, an increase of 146,000
since 1991. In the Western part of the United States, the change was more pronounced, with
worst case needs of renters in the suburbs increasing from 570,000 to 678,000, or almost one-
fifth (see exhibit 14).
Even in the South, where overall there was a modest decline in worst case housing needs be-
tween 1991 and 1995, the number of suburban households with worst case needs grew. In the
Midwest, worst case needs declined slightly in central cities but increased by over 8 percent in
the suburbs.
18
Exhibit 14
In the Early 1990s, Worst Case
Needs Grew Quickly in the Suburbs
Households With Worst Case Needs (Thousands)
Change, 1991-1995
Number
1991
1993
1995
(Thousands)
Percent
Northeast
1,140
1,296
1,300
160
14%
Central Cities
680
786
824
144
21%
Suburbs
386
399
388
2
1%
Non-Metro
74
111
87
13
18%
Midwest
996
1,151
1,006
10
1%
Central Cities
542
610
528
-14
-3%
Suburbs
241
304
261
20
8%
Non-Metro
213
237
217
4
2%
South
1,476
1,517
1,454
-22
-1%
Central Cities
697
750
664
-33
-5%
Suburbs
494
519
509
15
3%
Non-Metro
285
248
280
-5
-2%
West
1,334
1,386
1,560
226
17%
Central Cities
617
699
739
122
20%
Suburbs
570
555
678
108
19%
Non-Metro
147
132
143
-4
-3%
United States
4,946
5,350
5,320
374
8%
Central Cities
2,536
2,845
2,755
219
9%
Suburbs
1,691
1,777
1,837
146
9%
Non-Metro
719
728
727
8
1%
Source: HUD-PD&R tabulations from the American Housing Survey
Shortages of units that are both affordable and available to extremely-low-income renters are
greatest in the suburbs, the same areas in which worst case needs are growing most rapidly.
Across the Nation in 1995, there were only 39 extremely-low-rent units available for every
100 extremely-low-income renters in the suburbs, compared with 43 units in central cities and
56 units in non-metro areas. (see exhibit 15).
19
Exhibit 15
Mismatches Between Extremely-Low-Income Renters and Available
Rental Units They Can Afford are Worst in the Suburbs
60
56
44
43
Extremely-Low-Rent Units Available Per 100
Extremely-Low-Income Renters, 1995
39
40
20
0
All
Central Cities
Suburbs
Non-Metro
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
Even in relatively low-rent rural areas, worst case needs failed to drop.
Outside of metropolitan areas, renters are less likely to have worst case housing needs, and those
renters with worst case housing problems are somewhat more likely to live in housing units with
severe physical problems. Nevertheless, affordability is the overwhelming housing problem in
non-metropolitan America just as it is within metropolitan areas. Over three-fourths (76 percent)
of non-metropolitan households with worst case needs have severe rent burdens as their only
housing problem.
Although housing costs are lower in non-metro areas, here as elsewhere in America the economic
boom of the 1990s failed to reduce the number of households with worst case housing needs. The
level of worst case needs in non-metro areas rose slightly between 1991 and 1993 and then did
not drop at all between 1993 and 1995, remaining at 727,000 families and individuals (see exhibit 14).
20
Supplementary Findings
Finding 5:
The most serious housing needs are concentrated among households with
the lowest incomes.
The vast majority of renter households with worst case needs have extremely low
incomes. The incidence of worst case needs falls sharply as income increases.
It is the poor who cannot cope with America's robust, market-driven system of providing hous-
ing-unless they receive help from publicly funded housing assistance programs. Worst case
housing needs are defined as severe housing problems among unassisted very-low-income
renters, renters with incomes below 50 percent of area median. The Federal preferences for
housing assistance that have been suspended in recent years-and will almost certainly be
repealed by pending housing legislation-have the effect of targeting assistance to a yet lower
income group, those with incomes below 30 percent of area median. In place of the Federal
preferences, new housing legislation will reserve some units for this extremely-low-income
group. It will also allocate assistance to other households with incomes of up to 80 percent of the
area median.
The total number of renter households with severe or "priority housing problems" in 1995 in-
cludes the 5.3 million very-low-income renters with worst case needs. Another 565,000 renters
also had priority housing problems, but they had incomes above 50 percent of the area median.
Exhibit 16
Over Two-Thirds of Renters With Priority Problems
Have Income Below 30 Percent of Median
Total Households With Problems = 5.8 Million
50
42.4%
40
Percent of Priority Problems
30
256%
20
15.8%
10
6.6%
2.9%
1.7%
1.0%
1.6%
2.4%
0
<20
21-30
31-40
41-50
51-60
61-70
71-80
81-100
101+
Household Income as Percent of HUD-Adjusted Median Family Income, 1995
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
21
As exhibit 16 shows, over two-thirds of renter households with severe housing problems have
incomes below 30 percent of area median, which is approximately the official poverty threshold.
A startling 42 percent (2.4 million) of renters with severe housing problems have incomes below
20 percent of the area median. Almost 63 percent have household incomes that fall below Federal
poverty cutoffs that, it must be remembered, are not adjusted for geographical differences in
incomes.⁷
Almost 70 percent of unassisted, extremely-low-income renters have worst case housing needs.
As soon as a household's income rises above 30 percent of area median income-to between
31 and 40 percent of median-the likelihood that the household has severe housing problems is
only one in three. In the group just above the very-low-income cutoff but eligible for units pro-
duced by HOME and the Low Income Housing Tax Credit (51 to 60 percent of area median
income), less than 7 percent have priority problems. Less than 5 percent of those in the group
between 61 and 80 percent of median have severe housing needs (see exhibit 17). Yet legislation
under consideration by Congress would take from this group up to 65 percent of households
newly admitted to public housing and 60 percent of those newly receiving tenant-based Section 8
assistance (see exhibit 5 on pages 7 and 8).
Not only are priority needs concentrated at the bottom of the income ladder, but most very-low-
income renters have some housing problem, even if it is not a priority problem. In marked con-
trast, as income increases above the very-low-income cutoff, the probability of encountering
other housing problems, which most often include paying between 31 and 50 percent of income
for housing, drops rapidly.
The public housing and Section 8 programs have historically been well targeted to the
income groups most likely otherwise to have acute housing needs.
Public housing and the tenant-based Section 8 program currently direct about three-fourths of
assistance to extremely-low-income renters, those with incomes below 30 percent of the area
median (see exhibit 17). The project-based Section 8 programs also are remarkably well targeted
to those who otherwise would be most likely to have acute housing needs, with 70 percent of
units occupied by extremely-low-income renters.
Since 1974, the basic income ceiling for Federal housing assistance has been 80 percent of the
area median. Since 1981, however, mandatory quotas have directed assistance in each program to
households with incomes below 50 percent of median: 75-85 percent of the assistance for public
housing and project-based Section 8 (depending on the age of the project) and essentially 100
percent of the assistance for tenant-based Section 8. The deeper actual targeting of these pro-
grams, in which 70-75 percent of residents are extremely low income, is a result of several
factors. One is the practice of "Federal preferences" enacted by Congress in 1978 and 1981 but
not implemented until 1988. Federal preferences put households with worst case needs ahead of
others on waiting lists for assisted housing.
7.
See exhibit 1 for the relationship between percent-of-median income levels and poverty thresholds.
22
Exhibit 17
Renters With Income Below 30 Percent of Median Are the Only Groups
Likely To Have Severe Housing Problems
100
80
Percent of Unassisted Renters in Income Group
60
40
20
0
<20
21-30
31-40
41-50
51-60
61-70
71-80
81-100
101+
Household Income as Percent of HUD-Adjusted Area Median Family Income, 1995
Priority Problems
Other Problems
Number of Households (in Thousands)
% of Median
<20
21-30
31-40
41-50
51-60
61-70
71-80
81-100
101+
Unassisted With
Priority Problems
2,493
1,504
932
391
173
100
60
94
139
Unassisted With
Other Problems
261
606
1,185
1,470
1,247
1,024
588
709
683
Total Unassisted
3,298
2,436
2,531
2,523
2,360
2,422
1,918
3,712
8,295
"Priority problems" are defined as substandard housing, rent burdens over 50 percent of income, homelessness, or
involuntary displacement. These AHS tabulations count only severe structural problems and rent burdens.
"Other problems" include rent burdens between 30 percent and 50 percent of income, crowding, or moderate
structural problems.
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
23
Exhibit 18
Housing Assistance Is Well Targeted to the Income Groups With Priority Problems
80
70.6%
68%
60
Percent Share of Total Problems
or Total Assisted
40
22.4% 23.2%
20
2.9% 3.3%
4.3%
2.9%
0
0-30
31-50
51-60
61-80
Household Income as Percent of Area Median
Priority Problems
Assisted
Rental Assistance by Program and by Household Income as Percent of Area Median
(Assisted Households in Thousands, Percent of Program by Group)
0-30%
31-50%
51-60%
61-80%
81%+
Total
Tenant-Based Section 8
1,048
300
32
15
4
1,400
Percent of Program
75%
21%
2%
1%
0%
100%
Project-Based Section 8
976
360
41
20
3
1,400
Percent of Program
70%
25%
3%
1%
0%
100%
Non-Section 8 Project-Based
97
121
35
31
15
300
Percent of Program
33%
40%
12%
10%
5%
100%
Public Housing
892
233
36
26
13
1,200
Percent of Program
75%
19%
3%
2%
1%
100%
Total Assisted*
3,012
1,015
145
93
35
4,300
Percent of All Assisted
71%
23%
3%
2%
1%
100%
Priority Problems by Household Income as Percent of Area Median
0-30%
31-50%
51-60%
61-80%
81%+
Total
Priority Problems
3,997
1,323
173
160
233
5,886
Percent of Priority Problems
68%
22%
3%
3%
4%
100%
*Does not include the following programs: Indian housing; Section 8 moderate rehabilitation.
Source: HUD-PD&R tabulations from the 1995 American Housing Survey and 1997 program data (MTCS and TRACS)
24
Exhibit 19
History of the Federal Preference System
Before 1979
PHAs and owners used local preferences-consistent with statutory income target-
ing requirements-to determine admission to public and assisted housing.
1979
The Housing and Community Development Amendments of 1979 created the
first Federal preferences for selection of occupants of public and assisted housing.
Preference was to be given to those who were either involuntarily displaced from
their homes or living in substandard housing.
1983
The Housing and Urban-Rural Recovery Act of 1983 added a preference for
families paying more than one-half of their income for rent.
1988
Regulations implementing the three Federal preferences (see 1979 and 1983 above)
were published in January 1988 and became effective in July 1988. At that time,
90 percent of households newly admitted to the public housing and project-based
Section 8 programs and 100 percent of households newly admitted to the tenant-
based Section 8 programs had to be Federal preference holders.
1994
Regulations were published implementing legislative changes enacted in 1990 and
1992. Federal preferences now applied to 50 percent of newly admitted households
to public housing, 70 percent of newly admitted households to the project-based
Section 8 programs, and 90 percent of newly admitted households to the tenant-
based Section 8 programs.
1996
The continuing resolution enacted in January 1996 included a one-year suspension
of the Federal preferences. This suspension was implemented by notice in
February and March 1996.
1997
The Appropriations Act for fiscal year 1998 continued the suspension of Federal
preferences.
25
Federal preferences were controversial from the start because of a belief that they would lead to
an excessive concentration of poor and nonworking families in particular housing projects.
Exceptions intended to encourage greater economic diversity or income mixing within projects
were enacted in 1992 and 1994. Then, in 1996, Congress suspended mandatory Federal prefer-
ences for one year. That suspension has been extended by subsequent appropriations laws, and
the Federal preferences will almost certainly be repealed by new housing legislation. The pro-
gram information shown in exhibit 18 dates from February 1997 for public housing and tenant-
based assistance and June 1997 for project-based assistance. It probably reflects very little
change resulting from the suspension of Federal preferences starting in 1996, since it takes time
for program administrators-and, particularly, public housing authorities-to adopt new policies.
In addition, the turnover rate for public and assisted housing is less than 15 percent per year,
so for some time aggregate program data will reflect old policies.
Waiting list preferences are not the only reason for the deep actual targeting of rental assistance
programs. A particularly powerful factor is the calculation of the household's share of rent at
30 percent of household income. Relatively higher income households may find more attractive
housing at 30 percent of their income than they could find in the assisted housing projects for
which they might apply, particularly when those projects are located in relatively undesirable
neighborhoods. Percent-of-income rents probably have been more important than the Federal
preferences in the heavy use of housing assistance by those with incomes below 30 percent of the
area median. Indeed, even before the Federal preferences were implemented in 1988, public and
assisted housing programs were used primarily by households with extremely low incomes.
However, some public and assisted housing projects are found in highly desirable locations and
can attract relatively higher income households, even when they must pay 30 percent of their
income as rent. Already there is a group of public housing projects that largely exclude the poor.
Those projects identified as "high end" in exhibit 20 have fewer than 20 percent of their occu-
pants with incomes below $10,000 per year. As the table shows, such projects are particularly
likely to be located in low-poverty neighborhoods. Almost two-thirds (63.5 percent) are in census
tracts with fewer than 20 percent of persons living in poverty, while only 35.4 percent of more
typical projects are in these low-poverty locations.
Furthermore, recent legislation encourages more widespread use of "ceiling rents" for public
housing. Ceiling rents permit public housing authorities to charge a maximum rent that is less
than 30 percent of income to make public housing projects more competitive with private market
alternatives and to help projects retain working tenants as residents when their incomes rise.
26
Exhibit 20
Some Public Housing Projects Exclude the Poor
Poverty Rate
High-End
Other
of Tract
Projects*
Projects
Total
Number
Percent
Number
Percent
Number
Percent
0-4%
21
10.6
346
2.6
367
2.7
5-9%
36
18.8
1,196
9.0
1,232
9.1
10-19%
66
34.1
3,162
23.8
3,228
23.9
20-29%
38
20.0
3,268
24.6
3,306
24.5
30-39%
16
8.2
2,244
16.9
2,260
16.8
40%+
16
8.2
3,084
23.2
3,100
23.0
Total
193
1.2%
13,300
98.8%
13,493
100%
*A high-end project is any project in which at least 20 percent of the residents have incomes of more than $20,000 per
year or at least 70 percent have wages as their primary source of income but in which fewer than 20 percent of the
occupants have incomes of less than $10,000 per year.
Source: HUD PD&R tabulations of census data documented in A Picture of Subsidized Households, U.S. Department
of Housing and Urban Development, Office of Policy Development and Research, December 1996
Where opportunities to serve relatively higher income families exist, public housing authorities
(PHAs) and owners may take advantage of them. Many PHAs would prefer to serve relatively
higher income households as Federal budget reductions increase the prospect that PHAs will
have less money for public housing operating costs. A change in program rules enacted in 1996
permits PHAs to keep some of the additional rental income that can be charged to such residents
of public housing.⁸ Furthermore, serving relatively higher income households may reduce man-
agement and administrative problems and thereby reduce costs.
When housing assistance is tenant based, the program's maximum subsidy, or Fair Market Rent
(FMR), can have a powerful influence on whether the program is used mainly by the poor. FMRs
are calculated and published by HUD to make available 40 percent of the rental housing in an
area that passes basic health and safety standards and has turned over recently. In many locations,
this means that families with incomes close to (or above) the very-low-income limit of 50 percent
of local median income would receive a small enough subsidy that they do not have a strong
incentive to join the program. (The FMR minus 30 percent of their income is a small amount.)
8. Changes in governing legislation and program rules in 1996 permit PHAs to take actions to attract and retain working
families by removing what were perceived to be work disincentives created by the percentage of income rent structure. By
law, PHAs were permitted to adjust income used for rent calculations so that new earned income was not counted in the rent
calculation for 18 months, and then phased in over a 3-year period. By regulation, HUD has given PHAs much greater
freedom, permitting them to exclude all or part of the earned income of a family, or of an individual in the family, when
determining overall income of the family for eligibility or rent determination purposes. A PHA takes some risk in adopting
either the statutorily authorized adjustment to income or the regulatory exclusions from income, since any net loss of rental
income would not be offset by increased operating subsidy payments.
27
However, the House version of the pending public housing authorization bill (see exhibit 5),
would not only permit families with incomes up to 80 percent of the area median to receive
tenant-based assistance, it would also permit the subsidy standard to be set at 120 percent of the
FMR. This would on average make 75 percent of U.S. rental housing affordable under the pro-
gram and make the program attractive to relatively higher income families.
Given all these factors-the attractive locations of some public and assisted projects, ceiling
rents, incentives for PHAs to increase public housing rental income, and the possibility of higher
FMRs-the actual targeting of housing assistance to the neediest households could erode sub-
stantially over the next decade. To prevent this from occurring, the laws governing the public
housing and Section 8 programs should include explicit income targeting rules that direct a
substantial portion of housing assistance, overall and in each housing project, to the lowest
income groups.
Congress has refused for the past four years to appropriate funds for additional units of the type
of housing assistance most easily focused on extremely-low-income households-tenant-based
rental assistance. Because of the subsidy formula (FMR minus 30 percent of income), tenant-
based assistance can make housing affordable to the poorest families. Because the subsidies are
used throughout the rental market, income mixing is not needed within the group of families that
receive tenant-based assistance.
The current programs that produce affordable rental housing-HOME and the Low
Income Housing Tax Credit-can serve extremely-low-income households at affordable
rents, especially when combined with tenant-based rental assistance.
Current housing policy includes two programs-HOME and the Low Income Housing Tax
Credit-that produce affordable housing. Affordable housing is distinguished from assisted
housing by the use of flat or fixed rents instead of rents that vary with a household's income (see
exhibit 4). Generally, rental projects developed under HOME and the tax credit must set the flat
rents at a level no higher than 18 percent of the area median income for the size household that
would be expected to occupy units of different sizes (one, two, or more bedroom units). At the
maximum allowable rent. the units are affordable at 30 percent of income to households with 60
percent of area median income. However, residents pay the flat rent regardless of their actual
income.
Rental projects developed under HOME and the Low Income Housing Tax Credit are occupied
by families with a range of incomes, including extremely low incomes. But most households
with extremely low incomes served by HOME and tax credit rental projects fall into one of two
categories: They also have tenant-based assistance, or they have high-rent burdens, as shown for
HOME in exhibit 21.
28
Exhibit 21
The HOME Program Serves Extremely-Low-Income Households at
Affordable Rents, Especially When Combined With Tenant-Based Rental Assistance
Income Distribution of Households in HOME Rental Projects
18.9%
60.7%
20.3%
Percent of Area Median Income
Above 30%
0-30% With
0-30% Without
Tenant-Based
Tenant-Based
Assistance
Assistance
Distribution of Rent Burdens for Those Without Tenant-Based
Assistance and With Incomes 0-30% of Area Median Income
Percent of Income
Percent of
Paid as Rent
Extremely-Low-Income Households
0-10
8.6
11-20
3.7
21-30
12.6
31-50
33.3
>50
41.7
An evaluation of the Low Income Housing Tax Credit by the General Accounting Office, com-
pleted in early 1997, suggests that 39 percent of households occupying tax credit units also
receive a rental subsidy to make the housing truly affordable to that family. The average income
of these households is at 25 percent of the area median, compared with 45 percent of median for
renters of tax credit units that do not also receive a rental subsidy.9
9.
United States General Accounting Office, Tax Credits: Opportunities to Improve Oversight of the Low-Income Housing
Program, Report 97-55, Washington, DC, March 1997, pp. 136, 141, and 146.
29
Finding 6: Of the 12.5 million persons in households with worst case needs, almost 1.5
million are elderly and 4.5 million are children. The number of adults with
disabilities in households with worst case needs is estimated to be between
1.1 and 1.4 million.
Increases in the numbers of single adults with very low incomes and in the incidence of
worst case needs among them suggest that worst case needs rose markedly among
persons with disabilities.
The 1996 worst case needs report, Rental Housing Assistance at a Crossroads, analyzed several
sources to estimate the number of non-elderly adults with disabilities who receive housing assistance
and the number who have worst case housing needs. That report concluded that in 1993 at least 17
percent of worst case households had adults with disabilities present. While there was a slight drop in
the overall number of very-low-income households between 1993 and 1995, the number of non-
elderly single persons living alone or with other singles in households with incomes less than 50
percent of the area median increased by almost 300,000. Moreover, worst case needs rose signifi-
cantly among these households, from 44 to 48 percent. Therefore, the number of disabled adults living
in households with worst case needs may well have grown to between 1.1 and 1.4 million by 1995. 10
Housing assistance is an important part of this country's commitment to secure a dignified life for
citizens with disabilities. Unless the number of households receiving housing assistance continues to
expand, it may become an empty commitment for the hundreds of thousands of persons with disabilities
who will have to pay more than one-half of their incomes for housing and/or live in physically deficient
housing. In fact, the amount of public and assisted housing currently available to those with disabilities
could shrink as a result of legislation that permits housing authorities and owners to bypass households
with disabilities on waiting lists to create elderly-only "designated" housing projects (see exhibit 22).
Exhibit 22
Designated Housing
Recent legislation permits housing authorities and owners of Section 8 projects to "designate"
projects for the exclusive use of the elderly or people with disabilities. If housing is designated for
use by one group only, current occupants may not be displaced so long as they comply with the
terms of their lease. But as units become vacant, they can be reserved for the designated type of
household, even if another type of household has applied for the project and was placed on the
waiting list at an earlier date.
However, the legislation requires Section 8 owners to continue to serve some minimum number of
persons with disabilities. Also, a PHA that designates housing exclusively for the elderly must have
a plan to provide within the locality for the housing needs of very-low-income households with
persons with disabilities who would have been served had the designation not been made, and the
designation must be approved by HUD.
As of late 1997, HUD had approved the designation of almost 19,000 units of public housing for
exclusive use by the elderly. PHAs have requested fewer than the 6,300 available units of tenant-
based Section 8 available for persons with disabilities affected by the designation because they have
been able to use existing local resources to replace most of the designated units.
30
The number of elderly households with worst case needs problems remained above one
million in 1995, while more than two million families with children had worst case problems.
Among households with very low incomes, both families with children and households with an
elderly head but no children had almost a one-in-three chance of having worst case needs. This
situation occurs despite the fact that housing assistance has been heavily directed toward these
two groups-37 percent of very-low-income elderly and 29 percent of very-low-income families
with children receive housing assistance.
Families with children represent the largest group of households with worst case needs-more
than 2.1 million households of a total 5.3 million worst case households. Just over 1 million
elderly individuals or heads of households without children have worst case housing needs.
The total number of elderly with very low incomes dropped between 1993 and 1995 by about
300,000. This may reflect a growing portion of the elderly population protected from economic
distress by Social Security and private pensions. Nonetheless, many elderly remain both poor and
in need of housing assistance. These elderly poor are among those Americans for whom overall
economic expansion will not alleviate worst case housing needs. Continuing or returning to work
or gaining additional income through marriage are often unlikely.
As for all types of households, an overwhelming proportion (69 percent) of the elderly with
priority housing problems are extremely low income, with incomes below 30 percent of area
median (see exhibit 24). Similarly, unassisted, elderly-headed households whose incomes are
below 30 percent of area median are far more likely to have acute needs (63 percent) than those
with incomes between 31 and 50 percent (33 percent). Priority problems are rare among the
elderly with incomes between 51 and 80 percent of median where only 72,000 (9 percent) have
severe needs.
Inevitably, proposals designed to attract families with a broader range of incomes into public
housing and project-based assisted housing would have the consequence of reducing the number
of worst case households that have access to housing assistance. These proposals should be
carefully crafted to apply only to those situations in which there is a compelling need to make
this tradeoff. For example, the Administration proposes to permit ceiling rents for public housing
that are as low as 75 percent of the operating costs of a public housing development but would
not permit such ceiling rents for developments occupied predominantly by the elderly. There is
10. In 1995 AHS found 656,000 renter households with no children or elderly persons but at least one person receiving
Supplemental Security Income (SSI). Of these, 559,000 had very low incomes; 227,000 (41 percent) of these very-low-
income households had worst case housing needs. The equivalent figures from the 1996 report, using the 1993 AHS, were
422,000 very-low-income non-elderly renters receiving SSI, of whom 144,000 (34 percent) had worst case needs. However,
HUD has always known that this AHS proxy for persons with disabilities is incomplete. The 1996 report compared the 1993
AHS with data from the Social Security Administration for SSI recipients in 1994. An extrapolation from SSI figures estimated
that 2,148,000 renters were non-elderly adults with disabilities, of whom 881,000 (41 percent) had worst case needs (see
table 2 of the 1996 report). An equivalent updated comparison file from the Social Security Administration is not available at
this writing. The range cited in the text (1.1 to 1.4 million) is an extrapolation that assumes constant relationships between
the number of persons reporting SSI in AHS and the number likely to be found in SSI data when they become available.
31
Exhibit 23
Worst Case Needs by Household Type, 1995
Total = 5.320 Million Households
Others* 40%
2.146 Million
Elderly Head, No Children 20%
Families With Children 40%
1.068 Million
2.106 Million
*For example, non-elderly singles and childless couples. Between 1.1 and 1.4 million households
are estimated to include adults with disabilities.
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
no compelling need for income mixing in housing for the elderly-no children for whom rela-
tively better-off families can provide role models and no need to build work incentives into the
rent structure.
The results of welfare reform are not yet clear but are not likely to produce a substantial
reduction in worst case needs.
In 1995, when the current AHS was conducted, welfare reform had not yet been enacted. In the
1995 AHS, one fourth of those with worst case needs reported receiving welfare payments from
either Aid to Families with Dependent Children (AFDC) or Supplemental Security Income (SSI).
Among the 2.1 million families with children who had worst case problems, 930,000 (44 per-
cent) reported AFDC or SSI payments. When worst case needs are measured on the basis of the
1997 AHS, most effects of welfare reform will still be unobservable because the data will de-
scribe conditions just one year after the enactment of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996.
32
Exhibit 24
Priority Problems Concentrate in the Poorest Households of Each Family Type
100
88%
77%
80
69%
Share of Priority Problems in
Family Type for Renters <80% Median
63%
60
40
29%
25%
20
18%
12%
2%
1%
3%3%
4% 5%
0%
0%
0
Families With Children
Elderly
Adults With Disabilities
Other*
Income as % of Area Median
0-30
31-50
51-60
61-80
*For example, non-elderly singles and childless couples.
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
The effect of welfare reform on the incomes of extremely-low-income families with children is
still uncertain. States have great flexibility to design their own income support systems under
Temporary Assistance for Needy Families (TANF), the successor to Aid to Families with Depen-
dent Children, and some families will receive increased support for a limited time period because
of generous disregard of earned income for determining benefit levels. In all States, however,
some families will lose benefits because they do not cooperate with the new rules requiring work
or training, while others may reach the time limits for TANF without finding jobs. Even families
that do find jobs will lose the income associated with their former benefits.
In the year following passage of the Act, welfare caseloads fell throughout the Nation, with the
number of recipient families in the typical State falling by more than one-sixth. Favorable job
markets, the specific policies implemented by the States, and the general message of the reform
all played some part in this change.
It is not possible at this stage to determine whether increases in earned income will exceed losses
of welfare benefits for the affected families, but rigorous evaluations of State reforms started
before the new Federal law provide some clues about the size of the effect that can be expected.
33
In Delaware, the evaluators found that after 12 months of implementation, the new welfare
program raised employment by 24 percent over the old welfare program, but the average
annualized gain in earnings for the caseload as a whole was just $668 per family per year. 11
After 21 months of experience with the new program in Minnesota, researchers found that
the rate of employment among families who had ever received welfare rose from 38 percent
under the older program to 52 percent under the new one. Earnings had risen at an annualized
rate of $694 per family per year. 12
After 15 months of experience in Florida, analysts reported an increase in employment from
34 percent under the old program to 37 percent under the new one, with earnings over the
past year higher by $157 per family per year under the new program. 13
Based on this earlier experience, the incomes of families under national welfare reform may be
higher, but not radically higher than they were under the old regime. Many affected families will
have low wages and will likely have worst case needs despite working. Moreover, policies that
effectively compel them to obtain access to a job may also lead some to rent more expensive
housing than they did when on welfare, because housing that is convenient to jobs will be more
costly than equivalent units that have less easy access. On balance, there is no reason to believe
that welfare reform will lead to a significant decline in worst case needs over the next few years.
Finding 7: Worst case needs continue to shift to the West.
The number of very-low-income renters in the West continued to increase between 1993 and
1995, while dropping in other regions. Once again, the West had the highest percentage of very-
low-income renters with acute housing needs, 42 percent, compared with 32 percent in the South,
33 percent in the Midwest, and 39 percent in the Northeast (see exhibit 25). The result is that the
number of Western households with worst case needs reached a record 1.56 million in 1995.
At the same time, renters living in the West who have very low incomes are considerably less
likely to receive Federal housing assistance than households in other parts of the country. Only
18 percent of very-low-income renter households in the West receive housing assistance, compared
with an average of 29 percent for very-low-income renters in the other three regions of the country.
11. David Fein and Jennifer Karweit, The ABC Evaluation: The Early Economic Impacts of Delaware's A Better Chance Welfare
Reform Program, Abt Associates, December 1997.
12. Cynthia Miller, Virginia Knox, Patricia Auspos, Jo Ann Hunter-Manns, and Alan Orenstein, Making Welfare Work and Work
Pay: Implementation and 18-Month Impacts of the Minnesota Family Investment Program, Manpower Demonstration
Research Corporation, October 1997. The research finding is a difference in earnings of $1,041 over 18 months, which was
converted to an annualized rate in the text.
13. James Kemple and Joshua Haimson, Florida's Project Independence: Program Implementation, Participation Patterns, and
First-Year Impacts, Manpower Demonstration Research Corporation, January 1994.
34
Exhibit 25
Western Renters Are Underserved Relative to Needs
45
42%
40
39%
35
33%
Percent of Very-Low-Income Renters in Region
32%
32%
30%
30
25%
25
20
18%
15
10
5
0
Northeast
Midwest
South
West
Worst Case Needs
Assisted
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
Virtually all public housing units and much of the project-based Section 8 stock were developed
before the large population shift to the West. The recent growth in the number of tenant-based
certificates and vouchers has not been large enough to balance these disparities in Federal hous-
ing assistance across the Nation. 14
The largest increases in worst case needs occurred in the Northeast and the West,
where the mismatch between the wages of entry-level workers and the rents of even the
most affordable housing continues to widen.
Because affordability is the overwhelming cause of worst case housing needs, those areas of the
country with high housing costs are the areas where worst case needs are growing the most
rapidly. Increasing income inequality and the loss of rental units that the lowest income families
can afford are particularly pronounced in these areas, as overall economic growth brings upward
pressures on rent. 15 Particularly in the Northeast and the West, working full-time at minimum
wage or living on a modest pension does not bring in enough income to pay the rent.
14. Since 1974, all housing assistance-newly produced units of public housing and project-based Section 8 as well as funding
for new units of tenant-based assistance-has been allocated to different parts of the country on the basis of a formula.
Although the formula has changed somewhat over time, it has failed to reflect worst case needs in any direct way and has
never taken into account the effect of historical patterns of housing assistance.
15. Affordable Rental Housing: When to Build, When to Preserve, When to Subsidize? A Study of Housing Market Dynamics in
41 Metropolitan Areas, HUD, Office of Policy Development and Research, forthcoming May 1998.
35
Exhibit 26
Mismatches Between Extremely-Low-Income Renters and Available
Rental Units They Can Afford are Worst in the West
60
48
48
45
Extremely-Low-Rent Units Available Per 100
Extremely-Low-Income Renters, 1995
40
31
20
0
Northeast
Midwest
South
West
Source: HUD-PD&R tabulations from the 1995 American Housing Survey
Between 1991 and 1995, the number of unassisted very-low-income renters with worst case
housing needs increased by 160,000 in the Northeast and 226,000 in the West (see exhibit 14,
page 19).
Mismatches between extremely-low-income renters and rental units affordable to them
are most severe in the West.
The mismatch between available extremely-low-rent units and extremely-low-income renters is
large and getting larger in all four census regions. Shortages are worst in the West, however,
where in 1995 for every 100 extremely-low-income renters there were only 31 units that were
either already occupied by extremely-low-income renters or vacant and for rent, compared with
the nationwide figure of 44 units per 100 renters (see exhibit 26).
36
Chapter 3
Policy Implications
The findings of this report suggest that economic growth alone will not ameliorate the record-
level housing needs among families with limited incomes. Not even families working full-time
at the minimum wage can afford decent quality housing in the private rental market. The report
also makes it clear that housing needs are found not just in big cities but increasingly in the
suburbs as well.
The fundamental reform of the Nation's welfare system, enacted in 1996, is likely to have far-
reaching effects on low-income families. These reforms occurred after the data in this report
were collected, and it is too early to measure welfare reform impacts on housing needs. Clearly,
though, many welfare recipients will find work. Some recipients will experience declining
incomes, as they lose income support from either program sanctions or time limits. In both cases,
housing assistance will continue to be needed to prevent and alleviate the distress and instability
people experience when they pay so much for rent that they cannot afford other necessities.
Worst case needs for housing assistance constitute a persistent structural problem of American
society, requiring a significant public policy response. The report suggests a clear and compelling
need for the Congress to provide greater support for Federal housing assistance-by expanding
both tenant-based rental assistance and programs that create and rehabilitate more affordable
housing units. And Congress should act carefully in reforming the income-targeting rules for
public and assisted housing programs to balance the goals of achieving a greater income mix in
public and assisted housing developments and of providing assistance to families with the most
severe housing needs.
A short-run policy response should include:
103,000 New Housing Vouchers. The Administration has asked Congress to fund 103,000
new housing assistance vouchers, including 50,000 welfare-to-work vouchers to help welfare
recipients find and keep jobs. Tenant-based assistance is a cost-effective way to reduce severe
rent burdens and provide access to rental housing throughout the private market. For
example, these vouchers can help extremely-low-income families live in housing supplied by
HOME and the Low Income Housing Tax Credit at affordable rents.
Ending the Delay on Reissuing Vouchers. Congress should end immediately its cost-saving
requirement placed on local housing authorities to hold for three months rental subsidies
returned by families leaving the program. This practice reduces by 40,000 the number of
subsidies in circulation and thus the number of families receiving housing assistance.
37
Expanding Production of Affordable Housing Through HOME and the Low Income
Housing Tax Credit. The Administration is also seeking to expand tools to build and
rehabilitate affordable housing. HUD's FY 1999 budget includes increased funding for the
HOME program, along with a new HOME Bank, a loan guarantee feature that would allow
communities to leverage up to five times their Federal grants for larger scale housing
investments. In addition, the Administration is proposing a substantial expansion of the Low
Income Housing Tax Credit that would create 180,000 new affordable rental units over the
next five years.
Careful Income Targeting of Federal Housing Assistance. Congress is considering
legislation which will determine the income levels of households who will be admitted to
public housing and to receive Section 8 rental assistance. The Clinton administration and
HUD strongly support the transformation of public and assisted housing developments into
healthier, mixed-income communities. But policymakers must be careful not to exclude poor
families altogether from these housing developments, nor to reduce unnecessarily the
numbers of families with worst case needs who can be served by Federal housing programs.
This report shows that this goal can be achieved while still continuing to serve families who
are working but who have low incomes and serious housing needs.
Three-fourths of tenant-based assistance should be reserved for families with incomes
below 30 percent of the area median, which is the current practice. Forty percent of units
that become vacant in public housing and in Section 8 projects should be reserved for
extremely-low-income households. Each project should be required to serve a minimum
number of extremely-low-income families to avoid gentrification of the most desirable and
best located housing.
38
Appendix A
Data on Housing Problems
Table A-1.
Housing Conditions of U.S. Renters and Owners, 1995, by Relative Income
Table A-2.
Housing Conditions of All Renters and Owners, 1978, 1983, 1989, 1991, 1993, and 1995
Table A-3.
Income Distribution and Ownership Rates of All Households With and Without Children,
1978, 1993, and 1995
Table A-4.
Housing Problems of Very-Low-Income Renters by Household Type, 1978, 1983, 1989,
1991, 1993, and 1995
Table A-5.
Housing Problems and Characteristics of Very-Low-Income Renters by
Household Type, 1995
Table A-6.
Housing Problems and Characteristics of Worst Case Renters by Household Type, 1995
Table A-7.
Detailed Housing Problems of Worst Case Renters by Household Type, 1995
Table A-8.
Housing Problems Among Very-Low-Income Renters by Race and Ethnicity, 1978, 1983,
1989, 1991, 1993, and 1995
Table A-9.
Housing Conditions Among Very-Low-Income Renters by Region, 1978, 1983, 1989,
1991, 1993, and 1995
Table A-10.
Assistance and Worst Case Needs Among Very-Low-Income Renters by Region and
Location, 1995
Table A-11.
Income Distribution, Priority Housing Problems, and Assistance of Renters With and
Without Children, 1978, 1993, and 1995
Table A-12.
Housing Problems, Characteristics, and Earnings of Non-Elderly Renters by Relative
Income and Household Type, 1995
Table A-13.
Assisted Renters and Percent With Wages as Primary Source of Income by Household
Type and Relative Income, 1995
Table A-14.
Measures of Housing Mismatch: Numbers of Affordable Units Per 100 Renters
With Incomes Below 30 Percent or 50 Percent of Area Median Income by Region,
1989, 1991, 1993, and 1995
A-1
Table A-1
Housing Conditions of U.S. Renters and Owners, 1995, by Relative Income
Household Income as % of HUD-Adjusted Area Median Family Income
All
(0-50%)
(51-80%)
(81-120%)
(121%+)
Incomes
Number of Renter
Households With: (Thousands)
14,562
7,164
6,723
5,700
34,150
Rent Burden >50% Income
5,927
229
30
0
6,186
Rent Burden 31-50% Income
4,252
2,436
662
38
7,388
Severely Inadequate Housing
529
117
107
96
848
Moderately Inadequate Housing
1,242
463
343
228
2,276
Crowded Housing
1,150
294
161
68
1,674
Multiple Problems*
1,893
203
65
11
2,173
No Problems
1,951
3,510
5,217
5,164
15,843
Assisted
3,772
464
298
114
4,648
Priority Problems**
5,320
333
134
97
5,884
Number of Owner
Households With: (Thousands)
11,629
10,282
13,245
28,387
63,543
Cost Burden >50% Income
3,593
864
350
114
4,920
Cost Burden 31-50% Income
2,605
2,133
1,828
1,476
8,042
Severely Inadequate Housing
372
226
185
397
1,181
Moderately Inadequate Housing
764
380
384
539
2,068
Crowded Housing
326
200
195
159
880
Multiple Problems
673
200
146
57
1,076
No Problems
4,663
6,683
10,437
25,747
47,531
Priority Problems
3,861
1,069
517
502
5,949
Percent of Renter Households With:
Rent Burden >50% Income
41%
3%
0%
0%
18%
Rent Burden 31-50% Income
29%
34%
10%
1%
22%
Severely Inadequate Housing
4%
2%
2%
2%
2%
Moderately Inadequate Housing
9%
6%
5%
4%
7%
Crowded Housing
8%
4%
2%
1%
5%
Multiple Problems
13%
3%
1%
0%
6%
No Problems
13%
49%
78%
91%
46%
Assisted
26%
6%
4%
2%
14%
Priority Problems
37%
5%
2%
2%
17%
Percent of Owner Households With:
Cost Burden >50% Income
31%
8%
3%
0%
8%
Cost Burden 31-50% Income
22%
21%
14%
5%
13%
Severely Inadequate Housing
3%
2%
1%
1%
2%
Moderately Inadequate Housing
7%
4%
3%
2%
3%
Crowded Housing
3%
2%
1%
1%
1%
Multiple Problems
6%
2%
1%
0%
2%
No Problems
40%
65%
79%
91%
75%
Priority Problems
33%
10%
4%
2%
9%
*
Two or three of the following: rent burden >30%, severe or moderate physical problems, and overcrowding.
** Housing costs >50% income or severely inadequate housing among unassisted households.
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-2
Table A-2
Housing Conditions of All Renters and Owners, 1978, 1983, 1989, 1991, 1993, and 1995
1978
1983
1989
1991
1993
1995
Number of Renter
Households With: (Thousands)
26,919
29,952
33,767
33,351
33,472
34,150
Rent Burden >50% Income
3,661
5,481
5,187
5,426
5,948
6,187
Rent Burden 31-51% Income
4,765
5,661
6,983
6,938
7,163
7,385
Severely Inadequate Housing
1,677
1,617
1,587
1,347
910
849
Moderately Inadequate Housing
2,105
2,037
2,441
2,375
2,253
2,277
Crowded
1,548
1,692
1,722
1,644
1,503
1,673
Priority Problems
4,695
5,999
5,622
5,691
5,824
5,886
Other Problems
5,976
6,479
7,466
7,479
7,431
7,773
No Problems
13,529
14,077
16,370
15,965
15,765
15,837
Assisted
2,719
3,474
4,309
4,216
4,452
4,654
Number of Owner
Households With: (Thousands)
50,470
54,889
59,916
59,796
61,251
63,544
Cost Burden >50% Income
1,645
2,360
3,170
3,432
3,798
4,913
Cost Burden 31-50% Income
2,423
3,376
6,351
7,171
7,166
8,053
Severely Inadequate Housing
939
933
1,576
1,527
980
1,173
Moderately Inadequate Housing
2,019
1,927
2,001
2,156
1,960
2,071
Crowded
1,625
1,153
953
883
858
881
Priority Problems
2,524
3,206
4,643
4,838
4,655
5,957
Other Problems
5,501
5,780
8,358
9,268
9,126
10,042
No Problems
42,395
45,904
46,914
45,684
47,470
47,545
Percent of Renter Households With:
Rent Burden >50% Income
14%
18%
15%
16%
18%
18%
Rent Burden 31-50% Income
18%
19%
21%
21%
21%
22%
Severely Inadequate Housing
6%
5%
5%
4%
3%
2%
Moderately Inadequate Housing
8%
7%
7%
7%
7%
7%
Crowded
6%
6%
5%
5%
4%
5%
Priority Problems
17%
20%
17%
17%
17%
17%
Other Problems*
22%
22%
22%
22%
22%
23%
No Problems
50%
47%
48%
48%
47%
46%
Assisted
10%
12%
13%
13%
13%
14%
Percent of Owner Households With:
Cost Burden >50% Income
3%
4%
5%
6%
6%
8%
Cost Burden 31-50°. Income
5%
6%
11%
12%
12%
13%
Severely Inadequate Housing
2%
2%
3%
3%
2%
2%
Moderately Inadequate Housing
4%
4%
3%
4%
3%
3%
Crowded
3%
2%
2%
2%
1%
1%
Priority Problems
5%
6%
8%
8%
8%
9%
Other Problems
11%
11%
14%
16%
15%
16%
No Problems
84%
84%
78%
76%
78%
75%
*Rent burden 31-50% of income, moderate physical problems, or overcrowding, but no priority problems among
unassisted households.
Source: HUD-PD&R tabulations of the 1978 and 1983 Annual Housing Surveys and the 1989, 1991, 1993, and
1995 American Housing Surveys
A-3
Table A-3
Income Distribution and Ownership Rates of All Households
With and Without Children, 1978, 1993, and 1995
Household Income as Percent of
HUD-Adjusted Area Median Income
0-50%
51-80%
81-120%
121%+
Total
Income Distribution
Households (Thousands)
With Children, 1978
6,651
6,765
8,525
10,325
32,266
% Distribution
21%
21%
26%
32%
100%
Without Children, 1978
13,557
8,403
9,039
14,124
45,123
% Distribution
30%
19%
20%
31%
100%
With Children, 1993
9,639
5,999
7,916
11,909
35,463
% Distribution
27%
17%
22%
34%
100%
Without Children, 1993
16,884
10,046
12,763
19,567
59,260
% Distribution
28%
17%
22%
33%
100%
With Children, 1995
9,689
6,541
7,612
13,422
37,265
% Distribution
26%
18%
20%
36%
100%
Without Children, 1995
16,503
10,904
12,356
20,665
60,428
% Distribution
27%
18%
20%
34%
100%
Owner Households (Thousands)
With Children, 1978
2,487
4,260
6,631
9,222
22,600
Ownership Rate
37%
63%
78%
89%
70%
Without Children, 1978
7,038
4,821
5,402
10,608
27,869
Ownership Rate
52%
57%
60%
75%
62%
With Children, 1993
2,992
3,500
5,769
10,565
22,826
Ownership Rate
31%
58%
73%
89%
64%
Without Children, 1993
8,807
6,185
8,088
15,344
38,424
Ownership Rate
52%
62%
63%
78%
65%
With Children, 1995
3,180
3,707
5,467
11,919
24,273
Ownership Rate
33%
57%
72%
89%
65%
Without Children, 1995
8,449
6,574
7,778
16,468
39,270
Ownership Rate
51%
60%
63%
80%
65%
Source: HUD-PD&R tabulations of the 1978 Annual Housing Survey and the 1993 and 1995 American
Housing Surveys
A-4
Table A-4
Housing Problems of Very-Low-Income Renters by Household Type,
1978, 1983, 1989, 1991, 1993, and 1995
Numbers of Households (Thousands)
As % of Households
1978
1983
1989
1991
1993
1995
1978
1983
1989
1991
1993
1995
All Households
10,682
12,138
13,384
14,013
14,749
14,562
Priority Problems
3,963
5,122
4,805
4,954
5,349
5,320
37%
42%
36%
35%
36%
37%
Severe Physical
Problems
961
874
716
615
470
400
9%
7%
5%
4%
3%
3%
Rent Burden > 50%
Income
3,226
4,564
4,363
4,588
5,048
5,057
30%
38%
33%
33%
34%
35%
Rent Burden Only
2,596
3,641
3,407
3,643
4,170
4,181
24%
30%
25%
26%
28%
29%
Other Problems
3,087
2,792
3,291
3,321
3,687
3,521
29%
23%
25%
24%
25%
24%
Moderate Physical
Problems
691
540
625
673
627
591
6%
4%
5%
5%
4%
4%
Rent Burden
31-50% Income
2,500
2,355
2,781
3,069
3,208
3,046
23%
19%
21%
22%
22%
21%
Crowded
470
461
504
462
479
558
4%
4%
4%
3%
3%
4%
No Problems
1,538
1,457
1,779
2,004
1,947
1,945
14%
12%
13%
14%
13%
13%
Assisted
2,094
2,767
3,509
3,447
3,770
3,774
20%
23%
26%
25%
26%
26%
Households With Children
4,166
5,091
5,892
6,149
6,653
6,509
Priority Problems
1,383
2,151
1,928
2,033
2,282
2,106
33%
42%
33%
33%
34%
32%
Severe Physical
Problems
312
346
262
203
175
143
8%
7%
4%
3%
3%
2%
Rent Burden > 50%
Income
1,166
1,940
1,768
1,921
2,187
2,014
28%
38%
30%
31%
33%
31%
Rent Burden Only
825
1,375
1,232
1,316
1,601
1,464
20%
27%
21%
21%
24%
23%
Other Problems
1,321
1,303
1,606
1,691
1,738
1,780
32%
26%
27%
28%
26%
27%
Moderate Physical
Problems
306
229
298
285
278
269
7%
5%
5%
5%
4%
4%
Rent Burden 31-50%
Income
954
1,033
1,273
1,347
1,441
1,463
23%
20%
22%
22%
22%
22%
Crowded
450
450
482
448
451
535
11%
9%
8%
7%
7%
8%
No Problems
500
453
648
758
762
762
12%
9%
11%
12%
11%
12%
Assisted
962
1,181
1,712
1,666
1,870
1,861
23%
23%
29%
27%
28%
29%
Source: HUD-PD&R tabulations of the 1978 and 1983 Annual Housing Surveys and the 1989, 1991, 1993, and 1995
American Housing Surveys
A-5
Table A-5
Housing Problems and Characteristics of Very-Low-Income Renters
by Household Type, 1995
Total*
Elderly,
Families
Nonfamily
Other
No
With
Other
Reporting
Non-
Children
Children
Families
SSI Income**
family
Total Households (Thousands)
14,563
3,341
6,509
979
559
3175
Number of Children
13,993
0
13,993
0
0
0
Number of Persons
35,824
4,143
24,798
2,241
632
3,969
Children/Household
0.96
0
2.15
0
0
0
Persons/Household
2.46
1.24
3.81
2.29
1.13
1.25
Number of Households With:
Priority Problems
5,320
1,068
2,106
352
227
1,566
Severe Physical Problems
400
66
143
14
41
137
Rent Burden > 50% Income
5,058
1,017
2,014
344
208
1,474
Burden Only
4,181
950
1,464
293
158
1,316
Multiple Problems
1,027
90
614
59
59
206
Other Problems
3,521
542
1,780
290
62
847
Multiple Problems
620
53
436
46
3
82
Burden Only
2,461
428
1,061
221
53
702
No Housing Problems
1,946
493
762
180
69
442
In Assisted Housing
3,775
1,238
1,861
156
201
321
One Person in Household
5,694
2,661
0
0
489
2,540
Female Head
8,417
2,312
3,977
323
323
1,482
Minority Head
6,990
942
4,144
513
276
1,108
AFDC/SSI Income
3,716
448
2,557
153
559
0
Social Security Income
4,169
3,022
536
157
146
308
Income Below Poverty
8,286
1,499
4,452
453
452
1,431
Earnings at Minimum Wage:
At Least Half-Time
6,758
261
3,688
625
78
2,116
At Least Full-Time
5,286
130
3,013
528
31
1,581
Earnings Main Source of Income
7,107
234
3,797
656
76
2,348
Housing Rated Poor***
1,078
110
629
74
67
195
Neighborhood Rated Poor***
1,852
231
1,041
115
70
398
Percent of Households With:
Priority Problems
37%
32%
32%
36%
41%
49%
Severe Physical Problems
3%
2%
2%
1%
7%
4%
Rent Burden > 50% Income
35%
30%
31%
35%
37%
46%
Burden Only
29%
28%
23%
30%
28%
41%
Multiple Problems
7%
3%
9%
6%
11%
6%
Other Problems
24%
16%
27%
30%
11%
27%
Multiple Problems
4%
2%
7%
5%
1%
3%
Burden Only
17%
13%
16%
23%
9%
22%
No Housing Problems
13%
15%
12%
18%
12%
14%
In Assisted Housing
26%
37%
29%
16%
36%
10%
One Person in Household
39%
80%
0%
0%
88%
80%
Female Head
58%
69%
61%
33%
58%
47%
Minority Head
48%
28%
64%
52%
49%
35%
AFDC/SSI Income
26%
13%
39%
16%
100%
0%
Social Security Income
29%
90%
8%
16%
26%
10%
Income Below Poverty
57%
45%
68%
46%
81%
45%
Earnings at Minimum Wage:
At Least Half-Time
46%
8%
57%
64%
14%
67%
At Least Full-Time
36%
4%
46%
54%
6%
50%
Earnings Main Source of Income
49%
7%
58%
67%
14%
74%
Housing Rated Poor
7%
3%
10%
8%
12%
6%
Neighborhood Rated Poor
13%
7%
16%
12%
12%
13%
*May not add up due to rounding.
**AHS proxy for households with persons with disabilities.
Respondent rates housing (neighborhood) quality 1-4 on scale of 1-10.
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-6
Table A-6
Housing Problems and Characteristics of Worst Case Renters
by Household Type, 1995
Total
Elderly,
Families
Nonfamily
Other
No
With
Other
Reporting
Non-
Children
Children
Families
SSI Income
family
Total Households (Thousands)
5,320
1,068
2,106
352
227
1,566
As % of Very Low Income
37%
32%
32%
34%
41%
49%
As % of Unassisted Very Low Income
49%
51%
45%
40%
63%
55%
Number of Children
4,507
0
4,507
0
0
0
Number of Persons
12,448
1,335
7,982
807
254
2,035
Children/Household
0.9
0
2.1
0
0
0
Persons/Household
2.3
1.3
3.8
2.3
1.1
1.3
Number of Households With:
Severe Physical Problems
401
66
143
14
41
137
Rent Burden > 50% Income
5,059
1,017
2,014
344
208
1,475
Burden Only
4,181
950
1,465
293
158
1,316
Multiple Problems
1,027
90
614
59
59
206
One Person in Household
2,246
841
0
0
200
1,206
Crowded
408
0
389
2
0
16
Need More Bedrooms
775
11
640
32
8
83
Female Head
3,048
748
1,331
119
117
734
Minority Head
2,435
276
1,332
187
106
526
AFDC/SSI Income
1,335
112
931
63
227
0
Social Security Income
1,383
954
187
81
30
130
Income Below Poverty
3,697
563
1,767
245
197
925
Income <150% Poverty
4,835
893
2,045
327
220
1,350
Income <30% Median
3,997
787
1,692
252
201
1,065
High School Graduate
3,612
578
1,285
267
134
1,350
Earnings at Minimum Wage:
At Least Half-Time
2,170
70
952
164
22
963
At Least Full-Time
1,404
22
660
116
6
598
Earnings Main Source of Income
2,521
75
1,056
193
33
1,165
Housing Rated Poor
452
43
235
33
37
105
Neighborhood Rated Poor
635
74
305
52
24
180
Percent of Worst Case Households With:
Severe Physical Problems
8%
6%
7%
4%
18%
9%
Rent Burden > 50% Income
95%
95%
96%
98%
91%
94%
Burden Only
79%
89%
70%
83%
69%
84%
Multiple Problems
19%
8%
29%
17%
26%
13%
One Person in Household
42%
79%
0%
0%
88%
77%
Crowded
8%
0%
18%
1%
0%
1%
Need More Bedrooms
15%
1%
30%
9%
4%
5%
Female Head
57%
70%
63%
34%
51%
47%
Minority Head
46%
26%
63%
53%
47%
34%
AFDC/SSI Income
25%
11%
44%
18%
100%
0%
Social Security Income
26%
89%
9%
23%
13%
8%
Income Below Poverty
69%
53%
84%
69%
87%
59%
Income <150% Poverty
91%
84%
97%
93%
97%
86%
Income <30% Median
75%
74%
80%
76%
88%
69%
High School Graduate
68%
54%
61%
76%
59%
86%
Earnings at Minimum Wage:
At Least Half-Time
41%
7%
45%
46%
10%
62%
At Least Full-Time
26%
2%
31%
33%
2%
38%
Earnings Main Source of Income
47%
7%
50%
55%
14%
74%
Housing Rated Poor
8%
4%
11%
9%
16%
7%
Neighborhood Rated Poor
12%
7%
15%
15%
10%
11%
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-7
Table A-7
Detailed Housing Problems of Worst
Case Renters by Household Type, 1995
Elderly
Family
Nonfamily
Total
Severe Physical Problems
Only
29
2.7%
29
1.2%
55
3.0%
112
2.1%
And Rent Burden > 50% Income
15
1.4%
57
2.3%
67
3.7%
139
2.6%
And Other Problem(s)
22
2.0%
71
2.9%
56
3.1%
149
2.8%
Rent Burden > 50% Income
Only
950
88.9%
1,757
71.5%
1,474
82.2%
4,181
78.6%
And Moderate Physical Problems
But Uncrowded
52
4.8%
212
8.6%
128
7.1%
392
7.4%
And Moderate Physical Problems
And Crowded
0
49
2.0%
11
0.6%
60
1.1%
And Crowded But Adequate
1
0.1%
283
11.5%
3
0.1%
287
5.4%
Total
1,068
100%
2,459
100%
1,793
100%
5,320
100%
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-8
Table A-8
Housing Problems Among Very-Low-Income Renters by Race
and Ethnicity, 1978, 1983, 1989, 1991, 1993, and 1995
Number of Households (Thousands)
As % of Households
1978
1983
1989
1991
1993
1995
1978
1983
1989
1991
1993
1995
Non-Hispanic White
6,673
7,395
7,626
7,908
8,127
7,579
Priority Problems
2,602
3,213
2,877
2,940
3,020
2,884
39%
43%
38%
37%
37%
38%
Severe Physical
Problems
500
429
368
335
228
171
8%
6%
5%
4%
3%
2%
Rent Burden > 50%
Income
2,215
2,928
2,665
2,736
2,869
2,758
33%
40%
35%
35%
35%
36%
Rent Burden Only
1,908
2,544
2,280
2,388
2,576
2,480
29%
34%
30%
30%
32%
33%
Other Problems
1,915
1,661
1,876
1,983
2,105
1,805
29%
22%
25%
25%
26%
24%
Moderate Physical
Problems
314
251
279
281
252
276
5%
3%
4%
4%
3%
4%
Rent Burden 31-50%
Income
1,682
1,479
1,685
1,782
1,918
1,640
25%
20%
22%
23%
24%
22%
Crowded
133
137
144
97
132
97
2%
2%
2%
1%
2%
1%
No Problems
1,088
1,087
1,205
1,344
1,292
1,241
16%
15%
16%
17%
16%
16%
Assisted
1,068
1,435
1,670
1,639
1,715
1,648
16%
19%
22%
21%
21%
22%
Non-Hispanic Black
2,643
2,842
3,343
3,525
3,725
3,676
Priority Problems
936
1,102
1,033
1,033
1,114
1,167
35%
39%
31%
29%
30%
32%
Severe Physical
Problems
367
296
198
158
104
121
14%
10%
6%
4%
3%
3%
Rent Burden > 50%
Income
655
912
906
929
1,043
1,096
25%
32%
27%
26%
28%
30%
Rent Burden Only
423
614
610
652
786
814
16%
22%
18%
19%
21%
22%
Other Problems
673
587
663
796
771
734
25%
21%
20%
23%
21%
20%
Moderate Physical
Problems
256
190
195
259
238
161
10%
7%
6%
7%
6%
4%
Rent Burden 31-50%
Income
484
486
538
626
626
638
18%
17%
16%
18%
17%
17%
Crowded
119
97
79
97
83
80
5%
3%
2%
3%
2%
2%
No Problems
285
199
312
365
369
336
11%
7%
9%
10%
10%
9%
Assisted
748
954
1,334
1,329
1,471
1,439
28%
34%
40%
38%
39%
39%
Hispanic Origin
1,123
1,460
1,915
2,010
2,214
2,584
Priority Problems
358
597
697
753
920
964
32%
41%
36%
37%
42%
37%
Severe Physical
Problems
88
107
119
95
108
92
8%
7%
6%
5%
5%
4%
Rent Burden > 50%
Income
292
539
617
709
852
914
26%
37%
32%
35%
39%
35%
Rent Burden Only
191
345
383
451
592
650
17%
24%
20%
22%
27%
25%
Other Problems
420
432
613
683
651
807
37%
30%
32%
34%
29%
31%
Moderate Physical
Problems
108
85
129
100
101
122
10%
6%
7%
5%
5%
5%
Rent Burden 31-50%
Income
279
312
450
550
522
612
25%
21%
23%
27%
24%
24%
Crowded
190
181
241
232
215
356
17%
12%
13%
12%
10%
14%
No Problems
118
133
205
228
209
301
11%
9%
11%
11%
9%
12%
Assisted
227
298
399
346
434
512
20%
20%
21%
17%
20%
20%
Source: HUD-PD&R tabulations of the 1978 and 1983 Annual Housing Surveys and the 1989, 1991, 1993, and 1995
American Housing Surveys
A-9
Table A-9
Housing Conditions Among Very-Low-Income Renters by Region,
1978, 1983, 1989, 1991, 1993, and 1995
Number Of Households (Thousands)
As % Of Households
1978
1983
1989
1991
1993
1995
1978
1983
1989
1991
1993
1995
Northeast
2,723
3,189
2,914
3,076
3,288
3,319
Priority Problems
1,146
1,333
1,137
1,140
1,295
1,300
42%
42%
39%
37%
39%
39%
Severe Physical Problems
289
275
192
187
148
143
11%
9%
7%
6%
5%
4%
Rent Burden > 50% Income
956
1,186
1,037
1,038
1,213
1,214
35%
37%
36%
34%
37%
37%
Rent Burden Only
762
925
819
835
977
1,006
28%
29%
28%
27%
30%
30%
Other Problems
664
702
516
638
631
587
24%
22%
18%
21%
19%
18%
Moderate Physical Problems
98
83
54
98
53
75
4%
3%
2%
3%
2%
2%
Rent Burden 31-50% Income
596
638
466
572
598
537
22%
20%
16%
19%
18%
16%
Crowded
84
88
45
59
66
46
3%
3%
2%
2%
2%
1%
No Problems
312
332
303
430
381
362
11%
10%
10%
14%
12%
11%
Assisted
599
826
962
867
980
1,070
22%
26%
33%
28%
30%
32%
Midwest
2,443
2,924
3,255
3,342
3,446
3,014
Priority Problems
859
1,199
1,074
1,000
1,151
1,006
35%
41%
33%
30%
33%
33%
Severe Physical Problems
177
155
156
135
90
81
7%
5%
5%
4%
3%
3%
Rent Burden > 50% Income
716
1,099
977
906
1,089
944
29%
38%
30%
27%
32%
31%
Rent Burden Only
630
944
810
763
958
814
26%
32%
25%
23%
28%
27%
Other Problems
662
649
796
872
779
663
27%
22%
24%
26%
23%
22%
Moderate Physical Problems
42
47
113
78
77
81
2%
2%
3%
2%
2%
3%
Rent Burden 31-50% Income
606
591
719
802
710
593
25%
20%
22%
24%
21%
20%
Crowded
56
67
78
74
75
42
2%
2%
2%
2%
2%
1%
No Problems
471
409
501
547
551
444
19%
14%
15%
16%
16%
15%
Assisted
451
664
882
923
965
901
18%
23%
27%
28%
28%
30%
South
3,327
3,338
4,392
4,535
4,768
4,534
Priority Problems
1,211
1,425
1,373
1,476
1,516
1,454
36%
43%
31%
33%
32%
32%
Severe Physical Problems
429
340
224
174
134
109
13%
10%
5%
4%
3%
2%
Rent Burden > 50% Income
858
1,165
1,217
1,366
1,411
1,377
26%
35%
28%
30%
30%
30%
Rent Burden Only
599
816
894
1,046
1,178
1,120
18%
24%
20%
23%
25%
25%
Other Problems
1,058
728
1,217
1,298
1,349
1,219
32%
22%
28%
29%
28%
27%
Moderate Physical Problems
472
324
386
384
381
322
14%
10%
9%
8%
8%
7%
Rent Burden 31-50% Income
705
541
953
1,005
1,078
1,006
21%
16%
22%
22%
23%
22%
Crowded
173
117
145
151
132
161
5%
4%
3%
3%
3%
4%
No Problems
416
394
663
664
677
732
12%
12%
15%
15%
14%
16%
Assisted
642
791
1,142
1,097
1,225
1,129
19%
24%
26%
24%
26%
25%
West
2,189
2,688
2,822
3,060
3,246
3,696
Priority Problems
746
1,167
1,221
1,338
1,386
1,560
34%
43%
43%
44%
43%
42%
Severe Physical Problems
74
99
144
119
97
67
3%
4%
5%
4%
3%
2%
Rent Burden > 50% Income
692
1,110
1,132
1,278
1,334
1,523
32%
41%
40%
42%
41%
41%
Rent Burden Only
598
954
883
1,002
1,058
1,239
27%
36%
31%
33%
33%
34%
Other Problems
705
707
763
796
925
1,053
32%
26%
27%
26%
28%
28%
Moderate Physical Problems
83
89
73
114
98
113
4%
3%
3%
4%
3%
3%
Rent Burden 31-50% Income
587
586
643
693
831
911
27%
22%
23%
23%
26%
25%
Crowded
162
194
231
175
201
310
7%
7%
8%
6%
6%
8%
No Problems
335
325
313
360
325
407
15%
12%
11%
12%
10%
11%
Assisted
401
489
525
566
604
676
18%
18%
19%
19%
19%
18%
Source: HUD-PD&R tabulations of the 1978 and 1983 Annual Housing Surveys and the 1989, 1991, 1993, and 1995
American Housing Surveys
A-10
Table A-10
Assistance and Worst Case Needs Among Very-Low-Income Renters
by Region and Location, 1995
Very-Low-
Percent of Worst Case
Income
Assisted
Worst Case
With Rent
Needing
Renters
Thousands
Percent
Thousands
Percent
Burden Only
Other Housing
Northeast
3,319
1,070
32%
1,300
39%
77%
16%
Central Cities
2,055
709
34%
824
40%
71%
20%
Suburbs
980
267
27%
388
40%
88%
9%
Non-Metro
284
95
33%
87
31%
86%
11%
Midwest
3,014
900
30%
1,006
33%
81%
12%
Central Cities
1,490
441
30%
528
35%
78%
13%
Suburbs
788
196
25%
261
33%
85%
13%
Non-Metro
735
264
36%
217
30%
82%
8%
South
4,533
1,129
25%
1,454
32%
77%
12%
Central Cities
2,028
580
29%
664
33%
81%
8%
Suburbs
1,525
300
20%
509
33%
81%
11%
Non-Metro
980
249
25%
280
29%
61%
23%
West
3,696
676
18%
1,560
42%
79%
16%
Central Cities
1,696
300
18%
739
44%
77%
17%
Suburbs
1,567
234
15%
678
43%
80%
17%
Non-Metro
433
142
33%
143
33%
90%
7%
United States
14,561
3,775
26%
5,320
37%
79%
14%
Central Cities
7,269
2,028
28%
2,755
38%
77%
15%
Suburbs
4,860
997
21%
1,837
38%
83%
13%
Non-Metro
2,432
750
31%
727
30%
76%
14%
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-11
Table A-11
Income Distribution, Priority Housing Problems, and Assistance of Renters With
and Without Children, 1978, 1993, and 1995
Income as Percent of HUD-Adjusted Area Median Income
Total
0-30%
31-50%
51-60%
61-80%
81-100%
101%+
All Renters
1978 (Thousands)
26,919
5,895
4,792
2,261
3,822
3,257
6,891
Income Distribution
100%
22%
18%
8%
14%
12%
26%
Priority Problems
4,688
3,015
953
156
203
130
231
% Priority Problems
17%
51%
20%
7%
5%
4%
3%
Assisted
2,729
1,425
670
167
218
114
134
% Assisted
10%
24%
14%
7%
6%
4%
2%
1993 (Thousands)
33,472
8,731
6,025
2,443
3,916
4,010
8,375
Income Distribution
100%
26%
18%
7%
12%
12%
25%
Priority Problems
5,825
4,176
1,175
147
145
58
124
% Priority Problems
17%
48%
19%
6%
4%
1%
2%
Assisted
4,459
2,856
916
210
195
118
163
% Assisted
13%
33%
15%
9%
5%
3%
2%
1995 (Thousands)
34,149
8,617
5,946
2,585
4,579
3,896
8,527
Income Distribution
100%
25%
17%
8%
13%
11%
25%
Priority Problems
5,886
3,997
1,323
173
160
94
139
% Priority Problems
17%
46%
22%
7%
4%
2%
2%
Assisted
4,654
2,884
892
225
238
184
171
% Assisted
14%
33%
15%
9%
5%
5%
2%
Renters With Children
1978 (Thousands)
9,667
2,178
1,998
967
1,547
1,141
1,837
Income Distribution
100%
23%
21%
10%
16%
12%
19%
Priority Problems
1,604
1,092
297
55
59
39
62
% Priority Problems
17%
50%
15%
6%
4%
3%
3%
Assisted
1,315
626
338
105
133
59
53
% Assisted
14%
29%
17%
11%
9%
5%
3%
1993 (Thousands)
12,635
4,075
2,578
1,049
1,453
1,290
2,197
Income Distribution
100%
32%
20%
8%
12%
10%
17%
Priority Problems
2,442
1,927
356
50
45
26
38
% Priority Problems
19%
47%
14%
5%
3%
2%
2%
Assisted
2,211
1,454
419
108
103
63
65
% Assisted
18%
36%
16%
10%
7%
5%
3%
1995 (Thousands)
12,991
3,893
2,615
1,082
1,753
1,274
2,375
Income Distribution
100%
30%
20%
8%
13%
10%
18%
Priority Problems
2,261
1,692
414
55
30
32
37
% Priority Problems
17%
43%
16%
5%
2%
2%
2%
Assisted
2,243
1,459
402
110
127
68
78
% Assisted
17%
37%
15%
10%
7%
5%
3%
Source: HUD-PD&R tabulations of the 1978 Annual Housing Survey and the 1993 and 1995 American Housing Surveys
A-12
Table A-12
Housing Problems, Characteristics, and Earnings of Non-Elderly Renters
by Relative Income and Household Type, 1995
Income as % of HUD-Adjusted Area Median Income
0-20%
21-30%
31-50%
51-60%
61-80%
81-100%
Renters With Children (Thousands)
2,569
1,324
2,615
1,082
1,753
1,274
Children/Household
2.2
2.1
2.1
2.0
1.7
1.7
Persons/Household
3.7
3.9
3.9
3.8
3.6
3.6
Percent of Households With:
Priority Problems
44%
42%
16%
5%
2%
3%
Severe Physical Problems
2%
2%
2%
2%
1%
2%
Rent Burden > 50% Income
44%
41%
13%
3%
1%
0%
Burden Only
29%
31%
11%
2%
1%
0%
Multiple Problems
15%
11%
4%
2%
0%
1%
Other Problems
5%
24%
51%
47%
36%
15%
Moderate Physical Problems
1%
3%
7%
7%
7%
4%
Rent Burden 31-50% Income
3%
23%
42%
35%
23%
6%
Burden Only
2%
15%
31%
31%
22%
6%
Crowded
2%
7%
15%
11%
7%
6%
Multiple Problems
1%
8%
11%
6%
1%
2%
No Housing Problems
8%
7%
18%
37%
55%
77%
In Assisted Housing
43%
27%
15%
10%
7%
5%
Female Head
78%
59%
45%
38%
34%
28%
Minority Head
70%
65%
57%
47%
38%
39%
AFDC/SSI Income
59%
39%
20%
9%
10%
3%
Social Security Income
8%
9%
8%
4%
6%
5%
Income Below Poverty
100%
91%
27%
1%
0%
0%
Income <150% of Poverty
100%
99%
83%
35%
9%
0%
High School Graduate
57%
64%
69%
76%
82%
86%
Earnings at Minimum Wage
At Least Half-Time
17%
68%
90%
97%
97%
98%
At Least Full-Time
5%
50%
85%
96%
96%
98%
Earnings Main Source of Income
28%
63%
86%
95%
94%
94%
Housing Rated Poor
12%
8%
8%
4%
6%
7%
Neighborhood Rated Poor
20%
16%
12%
8%
10%
7%
Other Non-Elderly Renters*
1,234
856
2,064
1,130
2,327
2,261
Persons/Household
1.5
1.5
1.5
1.5
1.5
1.5
Percent of Households with:
Priority Problems
65%
60%
29%
7%
4%
2%
Severe Physical Problems
5%
4%
3%
2%
2%
2%
Rent Burden > 50% Income
62%
58%
27%
5%
2%
0%
Burden Only
54%
51%
24%
2%
2%
0%
Multiple Problems
9%
9%
4%
1%
0%
0%
Other Problems
4%
16%
46%
50%
34%
19%
Moderate Physical Problems
2%
4%
7%
6%
5%
6%
Rent Burden 31-50% Income
2%
16%
43%
46%
29%
13%
Burden Only
2%
12%
39%
44%
28%
12%
Crowded
0%
0%
1%
1%
0%
1%
Multiple Problems
0%
3%
5%
3%
1%
0%
No Housing Problems
16%
7%
18%
38%
59%
76%
In Assisted Housing
16%
17%
4%
6%
3%
3%
One Person in Household
66%
60%
59%
58%
58%
56%
Female Head
51%
44%
39%
40%
38%
33%
Minority Head
43%
36%
38%
37%
30%
26%
AFDC/SSI Income
5%
5%
2%
1%
1%
1%
Social Security Income
11%
20%
8%
6%
3%
3%
Income Below Poverty
99%
62%
6%
0%
0%
0%
Income <150% of Poverty
100%
99%
50%
7%
0%
0%
High School Graduate
79%
75%
80%
82%
87%
90%
Earnings at Minimum Wage
At Least Half-Time
28%
66%
89%
95%
96%
97%
At Least Full-Time
3%
40%
84%
94%
95%
97%
Earnings Main Source of Income
53%
65%
87%
93%
93%
94%
Housing Rated Poor
7%
7%
6%
5%
4%
4%
Neighborhood Rated Poor
14%
13%
11%
9%
7%
7%
*Excludes nonfamily reporting SSI income.
Source: HUD-PD&R tabulations of the 1995 American Housing Survey
A-13
Table A-13
Assisted Renters and Percent With Wages as Primary Source of Income
by Household Type and Relative Income, 1995
Income as Percent of HUD-Adjusted Area Median Family Income
Total*
0-20%
21-30%
31-50%
51-60%
61-80%
> 80%
All Households
4,300,000
1,764,000
1,267,000
1,000,000
142,000
92,000
35,000
# With Wages
1,122,000
271,000
261,000
414,000
83,000
63,000
29,000
% With Wages
26
15
21
41
59
68
83
Families With
Children
2,058,000
1,081,000
432,000
422,000
65,000
42,000
16,000
# With Wages
825,000
191,000
207,000
319,000
57,000
37,000
15,000
% With Wages
40
18
48
76
88
88
94
Non-Elderly,
No Disability
1,817,000
1,015,000
335,000
357,000
58,000
38,000
14,000
# With Wages
794,000
187,000
202,000
305,000
53,000
34,000
13,000
% With Wages
44
18
60
86
90
91
93
Elderly Head
45,000
14,000
15,000
12,000
2,000
1,000
1,000
# With Wages
8,000
1,000
1,000
3,000
1,000
1,000
1,000
% With Wages
17
9
9
22
47
63
86
Disabled Person
in Family
196,000
52,000
82,000
53,000
5,000
3,000
1,000
# With Wages
23,000
3,000
4,000
11,000
3,000
2,000
1,000
% With Wages
12
5
5
20
54
65
78
Elderly Without
Children
1,362,000
323,000
549,000
410,000
48,000
26,000
6,000
# With Wages
43,000
14,000
7,000
12,000
4,000
4,000
2,000
% With Wages
3
4
1
3
8
17
38
Adults With Disabilities
Without Children
489,000
191,000
207,000
79,000
7,000
4,000
1,000
# With Wages
30,000
8,000
5,000
11,000
2,000
2,000
1,000
% With Wages
6
4
2
14
37
53
67
Others Without
Children
390,000
168,000
78,000
89,000
22,000
20,000
12,000
# With Wages
224,000
58,000
42,000
73,000
20,000
19,000
11,000
% With Wages
57
34
53
82
92
95
97
*Excludes Indian housing and Section 8 moderate rehabilitation.
Source: HUD-PD&R tabulations of 1997 program data (MTCS and TRACS)
A-14
Table A-14
Measures of Housing Mismatch: Numbers of Affordable* Units Per 100 Renters With Incomes
Below 30 Percent or 50 Percent of Area Median Income by Region, 1989, 1991, 1993, and 1995
1989
1991
1993
1995
Income as % of
Income as % of
Income as % of
Income as % of
Area Median
Area Median
Area Median
Area Median
<30%
<50%
<30%
<50%
<30%
<50%
<30%
<50%
All Units Affordable Below Cutoff/
100 Renters With Income Below Cutoff
U.S. Total
89
125
85
121
80
116
77
111
Northeast
81
109
82
108
70
99
72
100
Midwest
96
149
89
148
85
144
84
144
South
101
137
95
131
93
126
91
122
West
71
96
65
87
65
86
58
76
Available** Units Affordable Below Cutoff/
100 Renters With Income Below Cutoff
U.S. Total
48
76
47
75
46
74
44
69
Northeast
44
66
49
71
45
68
45
67
Midwest
53
89
51
89
48
88
48
84
South
57
86
54
83
53
81
48
76
West
32
56
30
52
32
54
31
49
Vacant Units Affordable Below Cutoff/
100 Worst Case Needing Other Housing Below Cutoff
U.S. Total
61
147
56
152
59
175
61
168
Northeast
40
62
43
94
43
104
58
118
Midwest
89
218
112
267
139
386
100
335
South
87
248
77
256
106
325
107
295
West
35
79
22
49
19
67
24
65
*Affordable assuming 30% of income is spent for rent.
**Units below cutoff vacant or occupied by households below cutoff.
Source: HUD-PD&R tabulations from the 1989, 1991, 1993, and 1995 American Housing Surveys
A-15
Appendix B
Glossary
Household and Family Types
Family-The "families" eligible for HUD programs have traditionally included households with
relatives, households with children, elderly single persons age 62 or older, and single persons
with disabilities. The Cranston-Gonzalez National Affordable Housing Act of 1990 broadened
the statutory definition of "family" in a way that makes all households eligible for rental pro-
grams. In this report, however, the term "family" refers only to non-elderly "family households"
in which one or more persons in the household are related to the householder by birth, marriage,
or adoption.
Families with children-Household with a child under age 18 present.
Elderly-Household in which the head of household or spouse is age 62 or older, and there are
no children present.
Nonfamily households-Households with a single non-elderly person living alone or only with
nonrelatives.
Households having members with disabilities-Ideally, this category should include all non-
elderly households with adults with disabilities present. However, none of the available data
sources count these households perfectly. The American Housing Survey (AHS) proxy used in
this and previous reports is known to be an underestimate, because it counts only single persons
living alone or with nonrelatives who report receiving Supplemental Security Income (SSI).
HUD program data show appreciably more households (without children) having members with
disabilities receiving rental assistance than does the AHS proxy. New data on SSI recipients who
are blind or have other disabilities permit more complete counts of very-low-income renters
receiving HUD assistance or having a severe rent burden. Even these data exclude very-low-
income persons who have disabilities with incomes above SSI levels.
Types of Income
Income-Income in AHS is based on the respondent's reply to questions about income during
the 12 months prior to interview. It includes amounts reported for wage and salary income, net
self-employment income, Social Security or railroad retirement income, public assistance or
welfare payments, and all other money income, prior to deductions for taxes or any other pur-
pose. Following HUD rules for income eligibility, early worst case reports also included imputed
income from equity in an owned home as income for owners, but income from equity is not
included in this report. In 1993, AHS began asking more detailed questions on nonwage income,
and the share of households reporting nonwage income rose from 63 percent (in 1991) to 77 percent.
B-1
Family income-Reported income from all sources for the householder (the first household
member 18 years or older who is the owner or renter of the housing unit) and other household
members related to the householder.
Household income-Reported income from all sources for all household members.
Housing Problems
Overcrowding-The condition of having more than one person per room per residence.
Rent or cost burden-Ratio between payments for housing (including utilities) and reported
household income. This calculation is based on gross income. It does not make the adjustments
to income required by housing assistance programs before percentage-of-income rents are deter-
mined. To the extent that respondents underreport total income, the AHS estimates overcount the
number of households with cost burden.
Moderate rent or cost burden-Housing costs between 31 and 50 percent of reported income.
Severe cost burden-Housing costs exceeding 50 percent of reported income.
Inadequate housing-Housing with severe or moderate physical problems, as defined in the
AHS since 1984. These definitions are presented in appendix A of the AHS published volumes in
detail and in appendix B of this report. Briefly, a unit is defined as having severe physical prob-
lems if it has severe problems in any of five areas: plumbing, heating, electrical system, upkeep,
and hallways. It has moderate problems if it has problems in plumbing, heating, upkeep, hall-
ways, or kitchen, but no severe problems.
Priority housing problems-Problems qualifying for Federal preference in admission to as-
sisted housing programs: paying more than one-half of income for rent (severe rent burden),
living in severely substandard housing (including being homeless or in a homeless shelter), or
being involuntarily displaced. Because the AHS sample tracks housing units and thus cannot
count the homeless, AHS estimates of priority problems in this report include only households
with cost burdens above 50 percent of income or severely inadequate housing.
Income Categories
HUD-adjusted area median family income (HAMFI)-In 1974, Congress defined "low
income" and "very low income" for HUD rental programs as incomes not exceeding 80 and 50
percent, respectively, of the area median family income, as adjusted by HUD. Statutory adjust-
ments now include upper and lower caps for areas with low or high ratios of housing costs to
income and, for each non-metropolitan county, a lower cap equal to its State's non-metropolitan
average. Estimates of the median family income and the official income cutoffs for each metro-
politan area and non-metropolitan county are based on the most recent Decennial Census results
and then updated each year by HUD. Each base income cutoff is assumed to apply to a house-
hold of four, and official cutoffs are further adjusted by household size: one person, 70 percent of
base; two persons, 80 percent; three persons, 90 percent; five persons, 108 percent; six persons,
116 percent; and so on.
B-2
Low income-Reported income not in excess of 80 percent of HAMFI or, if lower, the national
median family income. In 1995, 45 percent of AHS households reported incomes that fell below
the low-income cutoffs.
Very low income-Income not in excess of 50 percent of HAMFI. In 1995, 27 percent of AHS
households reported income below the very-low-income cutoffs.
Extremely low income-Income not in excess of 30 percent of HAMFI. In 1995, 14 percent of
AHS households reported income below 30 percent of HAMFI.
Poor-Household income below the official national poverty cutoffs for the United States for
that household size. The poverty cutoff for a family of four approximates 33 percent of HAMFI.
Forty-four percent of very-low-income households and 85 percent of extremely-low-income
households are poor.
Middle income-For this report, adjusted incomes between 81 and 120 percent of HAMFI.
About one-fourth of households (24 percent) were in this category in 1995.
Upper income-For this report, households with income above 120 percent of HAMFI.
One-third of U.S. households fell into this category in 1995.
Housing Assistance Status
Receiving assistance-From AHS data, includes those responding "yes" to the following AHS
questions: Is the building owned by a public housing authority? Does the Federal Government
pay some of the cost of the unit? Do the people living here have to report the household's income
to someone every year so they can set the rent?
Worst case or with acute needs-Unassisted very-low-income renters with the priority housing
problems that give them preference for admission to rental assistance programs.
Rent Affordability Categories
Extremely low rent-Annual rent, including utilities, is at or below 30 percent of 30 percent of
HAMFI. For rents, the HUD adjustments vary by number of bedrooms to reflect expected
household size: 0 bedrooms-1 person; 1 bedroom-1.5 persons; 2 bedrooms-3 persons; 3 bed-
rooms-4.5 persons, etc.
Very low rent-Annual rent, including utilities, is at or below 30 percent of 50 percent of HAMFI.
Location
(Standard) Metropolitan Statistical Area-From 1973 to 1983, the definitions of metropolitan
location in Annual Housing Survey data corresponded to the 243 Standard Metropolitan Statisti-
cal Areas (SMSAs) used in the 1970 census. Since 1984, metropolitan location in AHS has
referred to MSAs defined in 1983, based on the 1980 census.
Region-The four census regions are the Northeast, Midwest, South, and West.
B-3
Appendix c
Procedures Used To Estimate
Housing Needs From
American Housing Survey Data
To accurately estimate worst case needs for housing assistance from American Housing Survey
(AHS) data, it is essential to determine whether household incomes fall below HUD's official
very-low-income limits (50 percent of HUD-adjusted area median family income [HAMFI]),
whether a household already receives housing assistance, and whether an unassisted income-
eligible household has one or more of the priority problems that confer tenant selection prefer-
ence (rent burdens exceeding 50 percent of income, substandard housing, or being involuntarily
displaced).
This appendix discusses the procedures and definitions used with microdata from the 1995 AHS
to estimate the number of households in different income categories that have worst case needs
or other housing problems.
All estimates in this report base income category and rent burdens on household income for
all households.
Because HUD's official income limits have been based on 1990 census data since 1992,
limits based on 1990 census data were used for this report.
Area income limits. To categorize households in relation to "local" income limits as accu-
rately as possible within the limitations of the AHS geography, household income was com-
pared with area income limits for all households. Very-low- and low-income cutoffs for a
household of four-that is, 50 or 80 percent of HAMFI, respectively-were defined for each
unit of geography identified on the AHS national microdata tapes. Official income limits
were used directly for each of the 141 MSAs identified on the AHS tapes. For housing units
outside these MSAs, the AHS geography identifies only four regions, metropolitan status,
and six climate zones. Average income limits were estimated for each of these 48 locations.
Categorizing households by income. For all households, income status is determined by
comparing household income with the very-low- and low-income cutoffs, with appropriate
adjustments for household size. Households reporting negative income were categorized as
middle income if their monthly housing costs were above Fair Market Rent (FMR), since
many households in this situation appear to be reporting temporary accounting losses.
C-1
Receiving housing assistance. In AHS data, households are counted as receiving Federal
housing assistance if they answered "yes" to one of the following AHS questions: Is the
building owned by a public housing authority? Does the Federal Government pay some of the
cost of the unit? Do the people living here have to report the household's income to someone
every year so they can set the rent? Although the number and characteristics of households
responding affirmatively to these questions are generally consistent with program data,
detailed examination reveals that households often do not report their assistance status cor-
rectly. (See Duane T. McGough, Characteristics of HUD-Assisted Renters and Their Units in
1993, May 1997.)
Severe or moderate physical problems. The definitions are those used since 1984 in AHS
and defined in appendix A of published AHS volumes. A unit is considered severely inad-
equate if it has any one of the following five problems:
- Plumbing. Lacking piped hot water or a flush toilet or lacking both bathtub and shower,
all for the exclusive use of the unit.
- Heating. Having been uncomfortably cold last winter for 24 hours or more or three times
for at least six hours, each due to broken down heating equipment.
- Upkeep. Having any five of the following six maintenance problems: leaks from out-
doors, leaks from indoors, holes in the floor, holes or open cracks in the walls or ceilings,
more than a square foot of peeling paint or plaster, or rats in the last 90 days.
- Hallways. Having all of the following four problems in public areas: no working light
fixtures, loose or missing steps, loose or missing railings, and no elevator.
- Electrical. Having no electricity or having all of the following three electrical problems:
exposed wiring, a room with no working wall outlet, and three blown fuses or tripped
circuit breakers in the last 90 days.
A unit is defined as moderately inadequate if it has any of the following five problems, but none
of the severe problems:
- Plumbing. Having all toilets break down simultaneously at least three times in the last
three months for at least six hours each time.
- Heating. Having unvented gas, oil, or kerosene heaters as the main source of heat (since
these heaters give off unsafe fumes).
- Upkeep. Having any three of the six upkeep problems mentioned under severe problems.
C-2
- Hallways. Having any three of the four hallway problems mentioned under "severely
inadequate."
- Kitchen. Lacking a sink, range, or refrigerator for the exclusive use of the unit.
Weighting of AHS estimates, 1990 based. Because each housing unit in the AHS sample
represents many other units, the sample data are adjusted so that each year's total matches
independent estimates of the total housing stock. For 1995, these independent estimates were
based on the 1990 Census of Housing (1990 weights).
C-3
.S. Department of Housing and Urban Development
ffice of Policy Development and Research
FIRST-CLASS MAIL
ashington, DC 20410-6000
U.S. POSTAGE PAID
HUD
Permit No. G-795
fficial Business
enalty for Private Use $300
eturn Service Requested
(MENT
Or
HOUSING
11:31