HUD Reports Worst Case Housing Needs Decreased in 2017

HUD has released the seventeenth edition of Worst Case Housing Needs: 2019 Report to Congress, which measures various demographic and economic trends among very low-income (VLI) renter households with “worst-case” housing needs, who do not receive government assistance and spend more than 50 percent of their income on rent, live in inadequate housing, or both. Very low-income renters earn less than half of the Area Median Income (AMI).  

In 2017, 7.7 million households had wors- case needs, representing 6.3 percent of all U.S. households. This total has decreased 7 percent from 8.3 million in 2015, which the report attributes the decline to rising income and other economic factors lifting households out of poverty. However, the report notes that the affordable housing shortage has undermined those gains and worsened housing security for renters who remain low-income. The number of households with worst case needs also remains far above pre-recession levels and 30 percent higher than the 2007 estimate of 5.9 million households.  

Other report highlights include:  

• Nationally, 47.2 percent of VLI households had worst case needs in 2017. Ninety-five percent of worst-case households reporting having severe rent burdens only. Of the remaining 5 percent, half reported inadequate housing, and half reported both.  
• The number of households with worst-case needs declined between 2015 and 2017 across all racial and ethnic groups. Nonwhite households accounted for 52.9 percent of all worst-case needs, but non-Hispanic white households have the largest share among ethnic groups with 47.1 percent.  
• The number of VLI households with children decreased by 763,000 over the two years due to rising incomes. However, many more families would exhibit worst case needs without housing assistance.  
• Worst case needs were more prevalent in the Southern and Western states and in suburban areas, where relatively fewer VLI households receive government assistance. Less than a third of VLI householders were able to avoid severe housing problems without government assistance.  

The affordable housing shortage and strong demand from renters has intensified competition for available units, resulting in inefficient allocation: more than a third of units affordable to VLI households are instead occupied by higher-income households. While overall rental stock has grown slowly since 2015 and there is a surplus among higher-income renters, the number of affordable units declined four percent in that same period, outpacing the decline in worst case needs. In 2017, there were fewer than 60 affordable units available per 100 VLI renters, and only 35 units per 100 Extremely Low Income (ELI) renters, who make less than 30 percent of the AMI.  

As the number of unassisted VLI households dropped, the proportion of such households with worst-case needs increased, suggesting intensifying need among those who remain unassisted driven mainly by the affordable housing shortage. Furthermore, income gains have been offset by rising rents, and even with government assistance many VLI households have difficulty finding adequate and affordable housing. HUD points to the need to increase access to affordable housing by reducing regulatory barriers to development and recruiting more landlords to participate in voucher programs.