Not-So-Affordable Housing: Addressing Impacts on Low-Income Renters

Maya Pendleton, MPP Staff Writer, Brief Policy Perspectives

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A growing body of research suggests that increasing housing costs uniquely impact renters, particularly low-income renters. Researchers have linked eviction to a lack of affordable housing; over one million renters are evicted each year. For comparison, over one million homes were foreclosed during the peak of America’s financial crisis. Policymakers and advocates can mitigate the impacts of high prices on low-income renters through public policy by ensuring access to Low-income Housing Tax Credit units, reforming zoning laws, and reforming eviction policies.

The United States is Experiencing an Affordable Housing Shortage

A 2018 report from Harvard University’s Joint Center for Housing Studies estimates that between 1960 and 2016, the average rent payment in the United States rose by 62 percent while the average renter income increased by only five percent. The National Low Income Housing Coalition (NLIHC) estimates that for every 100 households categorized as extremely low-income, only 35 affordable rental units are available. Researchers have called the modern lack of housing affordability the “worst affordable housing crisis in several generations.”  While the lack of affordable housing is most extensive in America’s large, metropolitan cities, the dearth of affordable housing impacts all American cities and counties.

With rising rent costs and relatively stagnant wages, low-income renters often cannot find affordable housing on the private market, as the private market rarely produces new, affordable housing for low-income renters without a public subsidy. Newly built apartment buildings often require higher rents to cover operating and development costs. The public market is also not always a viable option for low-income renters, either. Only one in five low-income renter households who demonstrate need for assistance receives it, and wait times for public subsidies can last years and even decades.

Severely Rent-Burdened Homes Often Face Eviction

Rent is typically considered “affordable” if it costs no more than 30 percent of a household’s income. More than 11 million renters are severely cost-burdened according to this definition of affordability, spending more than half of their income on rent. Severely cost-burdened renters are often one misstep or one crisis – a car in need of repair, a sick child, or a medical emergency – away from eviction.

Once evicted, families often lose their personal possessions, children must attend new schools after relocating, adults lose their jobs, and studies have shown that eviction negatively impacts mental health. Perhaps most devastating, eviction remains on renters’ records and impairs their ability to secure adequate housing in the future. Research also reveals eviction’s disproportionate impact across race and gender; Black and Latinx women with children are at the greatest risk for eviction.

Potential Policy Solutions to the Housing Affordability Crisis

Policy makers and advocates continue to debate how to provide housing stability to low-income families. While no single recommendation creates a complete or perfect solution, the following proposals offer a good start:

Ensuring that the lowest income renters have access to Low-income Housing Tax Credit (LIHTC) units. The LIHTC provides tax credits to support construction or rehabilitation to affordable housing units. The program was improved in 2018 through an “income averaging option” that makes units affordable to renters on the lower end of the income distribution. Currently, “LIHTC developments ensure that some families with incomes below 60 percent of the area median income” have access to affordable housing. Families with the most need – who have incomes around or below 30 percent of the median income – still cannot afford LIHTC units without sacrificing other basic needs to pay rent. A report from the Center on Budget and Policy Priorities argues that states can increase the availability of LIHTC units to poor renters by requiring developments to either “set aside units for those families or show preference to developments that do so.

Reforming zoning laws that restrict housing supply. Zoning laws have been criticized for their role in decreasing housing affordability. Between 2010 and 2017 in Boston, for example, 10,500 homes were permitted while the city needed 16,000 new homes to keep up with growth. Moreover, zoning policies produce expensive regulatory costs which developers pass on to renters through high rents; the Department of Housing and Urban Development estimates that regulations make up 30 percent of development costs. Reforming zoning regulation could aid in decreasing housing costs. Some cities, including Boston and Washington, DC have begun to implement regulatory reform. Zoning reform should keep equity at the forefront to ensure communities “meet the housing needs of residents across the income spectrum.

Reforming eviction laws and policies to provide greater protection to renters at imminent risk of losing their housing. Cities can follow the lead of other jurisdictions and pass eviction laws. Eviction laws require landlords to prove tenants “violated specific expectations of tenancy before eviction.” Additionally, tenants should have more representation in eviction proceedings. A study from New York found that 99 percent of landlords have representation in eviction proceedings in comparison to only 27 percent of tenants. Moreover, tenants with representation were more likely to retain their housing. A publicly funded program providing legal counsel for tenants facing eviction could provide tenants with an increased ability to maintain their housing.

Having access to affordable, adequate housing allows families to “improve their health, advance economically, provide a quality education for their children, and meet other personal goals.” Our current housing system is failing; luckily, public policy has the capacity to increase the nation’s stock of affordable housing and decrease the incidence of evictions.

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