Not Nearly Enough Housing Affordable for Lowest-Income Renters, Nationwide and in DC

March 16, 2015

Nearly a quarter of renter households nationwide fell into the extremely low-income category in 2013, i.e., had incomes at or below 30% of the median for the area they lived in, according to a new National Low Income Housing Coalition report.

Three quarters of these 10.3 million or so households paid at least half their income for rent and basic utilities. This is one measure of the shortage of affordable rental housing in our country — only 31 units affordable and available to rent for every 100 ELI households.

The gap was much greater for the subset of households NLIHC classifies as deeply low-income, i.e. those with incomes no greater than 15% of their area’s median. Only 17 affordable, available units for every 100 of them, making for a shortage of 3.4 million units.

All but 5% of the DLI households paid more than half their income for rent, plus utilities. These, recall, are households that somehow scraped up the money. We don’t have a reliable figure for those who were homeless because they couldn’t.

Surprisingly, at least to me, the figures for the District are somewhat better. But they still confirm the need for more affordable housing, especially for the very lowest-income residents.

And perhaps the figures are overly rosy because, as I’ve written before, the area the District belongs to for affordability calculations includes some very well-off nearby communities.

With that caveat, here’s what NLIHC reports. In 2013:

  • The District had 40 affordable, available units for every 100 ELI households, making for a total shortage 32,752.
  • For every 100 DLI households, only 34 units were affordable and available — a shortage of 21,038.
  • All but 35% of ELI households and 26% of DLI households paid at least half their income for rent, plus utilities.

These figures, recall, are more than a year old. We’ve had condo conversions, out-in-out apartment house demolitions and subsidized housing losses since. Rents have risen, sometimes quite a lot, even for tenants supposedly protected by the District’s rent control laws.

The figures are nevertheless timely because the Mayor and her people are deep into developing the proposed budget for the upcoming fiscal year. As the DC Fiscal Policy Institute reports, they’ve got to close a $200 million gap between projected revenues and the funds needed to sustain existing programs and services.

Any significantly larger investment to create and preserve affordable housing would widen the gap the Mayor would have to close because the District’s budget must, by law, balance every year.

A wider gap likewise if she — or alternatively, the DC Council — opts for greater investments in housing vouchers — either those that subsidize affordable housing operations or those that enable ELI/DLI households to rent at market rates or both, as the Fair Budget Coalition has recommended.

And again a wider gap if our policymakers boost funding for short-shot assistance that would enable some of those households to catch up on overdue rent or move to a cheaper place, if they can find it.

DCFPI recommends that the Mayor use some of the funds left over from last fiscal year, but they can’t be used for investments that involve multi-year commitments. So it also recommends that she “find ways to raise revenues.” This, I take it, is a tactful way to broach the subject of tax increases.

It’s hard to see how the District will significantly reduce homelessness without them. Because, however complex and diverse the root causes, homelessness for each individual and family reflects their inability to pay for rent, plus the bills for lighting, heating and the like.

Every one of the ELI and DLI households that’s paying over half its income for rent, plus utilities is at high risk of homelessness. Investments in affordable housing for them will pay off in lower costs in other areas — including, but not limited to shelter.

That’s not the only reason the Mayor and Council should make affordable housing a priority — preservation, first and foremost, but creation to replace lost units too.

We have the diversity of our community to consider. We’ve got the well-being and future prospects of children who suffer not only from homelessness, but from unstable housing — and from the stresses their parents experience as they try to earn enough and juggle the bills to keep them somehow housed.

If tax increases are needed, I’ll willingly pay my share. I’d like to think that others whose incomes are well above the ELI/DLI maximums will do so too.

NOTE: As I put the finishing touches on this post, DCFPI issued its own meaty report on “DC’s vanishing affordable housing.” The report includes a number of recommendations for policies to reverse the trends it documents. Highly recommended.


DC Rents Way Out of Reach for Low-Income Households

March 20, 2013

We’ll learn next week what Mayor Gray plans to do about the affordable housing shortage in the District of Columbia.

We know he’s promised a one-time $100 million investment, but we’ll need his budget proposals to learn where the money would go — and if that’s all he’ll commit to.

The latest annual rental housing (un)affordability report from the National Low Income Housing Coalition provides a useful set of figures indicating needs in the District, as well as in each state and the nation as a whole.

If they don’t create a sense of urgency, I don’t know what will.

As I explained last year, NLIHC uses several set of figures — most of them drawn from federal sources — to arrive at what it calls a housing wage. This is the amount a renter would have to earn to afford a modest two-bedroom apartment, plus basic utilities in each jurisdiction.

The cost of the apartment is the U.S. Housing and Urban Development’s fair market rent estimate. The standard for affordability is the usual 30% of gross income.

NLIHC also does some calculations based on the applicable minimum wage — $8.25 in the District — and the average wage of renters in each jurisdiction.

Not surprisingly, the two-bedroom apartment is way out of reach for low-wage workers in the District — considerably further out of reach than for low-wage workers nationwide.

The same is apparently true for many other D.C. renters, since their average wage falls shorter as well.

Here first are the big picture numbers.

  • A household would have to have earnings totaling $4,707 a month — $56,480 a year — to afford the two-bedroom apartment in the District.
  • Assuming full-time, year round work, this translates into a housing wage of $27.15 an hour — a higher housing wage than for any state except Hawaii, though somewhat lower than for any of the top 10 metro areas, according to dcist .
  • The average renter wage here is $102 less per month than what would make the apartment affordable — an annual shortfall of $1,224.

And now the truly bad news figures for low-income District residents.

  • The two-bedroom apartment costs $607 a month more than would be affordable for an extremely low-income household, i.e., one whose income is at or below 30% of the median for the area.*
  • The apartment costs $983 a month more than a full-time minimum wage worker can afford.
  • So s/he would have to work 132 hours a week, every week to afford it — or live with three other full-time minimum wage workers and another working part-time.
  • This is 28 hours a week more than what NLIHC calculates for minimum wage workers nationwide, though it uses the lower federal minimum for them.
  • For residents who depend on Supplemental Security Income, the apartment costs a mind-blowing $1,199 more than would be affordable.

The story in the District is in many ways like the story NLIHC tells for the nation as a whole. The number of renter households has increased. Vacant apartments are scarce, creating the usual supply-demand pressure on costs.

But the supply side is also affected by the upscaling of once-affordable rental housing — and the fact that most new construction is also for fairly well-off households that, at least for now, prefer renting to owning.

This is how the free market works. It’s why we need public investments to create and preserve housing that’s affordable for low-income households.

And why we need vouchers that will enable others to live in market-rate units without spending more than half their income for rent, as nearly two-thirds of extremely low-income households in the District do.

The District has the revenues to make living in this high-cost city affordable for residents who haven’t shared in the prosperity those revenues indicate — that’s in fact made rents even less affordable for them.

It will have to choose to make ongoing commitments — and to target a very significant portion to its lowest-income residents who are homeless now or at high risk because they really can’t afford the rent they’re paying.

The Mayor says he’s worried that his One City will become “a city of only ‘haves’.” Let’s see what he does to make it more genuinely “inclusive” of the have-nots.

* According to the estimate NLIHC uses, this would be a maximum of $32,190.


DC Rental Costs Far Out Of Reach For Low-Income Households

May 25, 2011

Seems this is affordable housing month for my blog. Because I could hardly pass up the National Low Income Housing Coalition’s new figures. These show, in detail, how far out of reach affordable rental housing is for low-income households in the District and nationwide.

NLIHC slices and dices figures in various ways — all based on the U.S. Department of Housing and Urban Development’s annual fair market rents, i.e., the average costs of modest rental units, with basic utilities in every metropolitan area in the country.

The affordable standard also comes from HUD — 30% of gross household income. As you probably know, this is the standard commonly used by policymakers, analysts and advocates.

HUD is the prime source for the estimated area median income as well, though NLIHC had to do some calculations of its own to come up with current averages.

Both the FMRs and the AMI are somewhat crude tools for the District because it’s part of a metropolitan area that also includes nearby parts of Maryland and Virginia. This skews the AMI — and thus affordability estimates — upward.

That said, here are some of the key NLIHC (un)affordability indicators for low and not-so-low-income District renters.

  • A household would have to have an income of $58,440 a year to afford a two-bedroom apartment at the FMR rate.
  • This translates into a wage income of $28.10 an hour, assuming full-time, year-round employment — $4.68 more per hour than the estimated average hourly wage in the area.
  • The cost of the apartment is 153% of what a household earning the estimated average income for area renters could afford.
  • It’s unaffordable for 68% of D.C. renter households. That’s more than 93,600 renter households with excess rental burdens — well over a third of all households in the District.
  • A full-time minimum wage worker would have to put in 136 hours per week to afford the apartment — or share the apartment with another full-time minimum wage worker and a third working part-time.
  • The monthly rent on the apartment is $678 more per month than a household with an income at 30% of the AMI could afford.
  • Even a household with an income at 50% of AMI would be short $157 a month.
  • For someone dependent on Supplemental Security Income, even a studio apartment at the FMR rate is well out of reach — about one and two-thirds times the total SSI stipend.

One of the reasons to welcome these dismal figures is that they’re the latest in an annual series. They thus provide a barometer for the worsening housing affordability crisis that’s afflicting the District — and a large majority of other communities nationwide.

On the other hand, we’ve had more than enough figures to tell us that rental costs are threatening the well-being of low-income households — and from a number of sources too.

It’s lack of political will, not ignorance that’s allowing this problem to fester.


Funds For Low-Income Home Energy Assistance Fall Short Of Need

January 7, 2010

Winter has hardly begun, and we’ve already had well-below-freezing temperatures–even here in Washington, D.C. I’m sitting in my warm study, thinking about the low-income households who are struggling to pay their home energy bills–or to get along without heat because their service has been cut off.

The federal Low-Income Home Energy Assistance Program (LIHEAP), is intended to help these households meet their immediate energy needs–both heat in the winter and cooling in the summer.

The program has helped save millions of poor seniors, people with disabilities, other adults and their children from the impacts of unaffordable energy bills–hypothermia and heat prostration, hunger, homelessness, unmet medical needs and deaths and injuries caused by fallbacks like space heaters and stoves. But as with the rest of our safety net, millions fall through.

LIHEAP provides block grants to states, which they channel to local government agencies or nonprofits. It also includes an emergency contingency fund that the Secretary of Health and Human Services can tap to provide extra assistance, e.g., in cases of extreme weather, spikes in energy prices or unemployment.

Households qualify for a one-time payment of their past-due utility bills if their incomes are below a threshold defined by their state–generally either 150% of the federal poverty line or 60% of the state median income. But qualifying doesn’t mean getting because LIHEAP has never been adequately funded.

For Fiscal Year 2009, Congress appropriated a total of $5.1 million for LIHEAP–slightly more than $4.9 billion for basic grants and $590.3 million for the contingency fund. This was nearly double the funding for Fiscal Year 2008.

Yet the National Energy Assistance Directors Association reports that only 18.7% of eligible households received assistance. About 4.3 million households had their power shut off for non-payment.

For Fiscal Year 2010, President Obama proposed only $3.2 billion for LIHEAP, plus a trigger for additional funding if energy prices spiked again. Congress instead voted to fund the program at its Fiscal Year 2009 level. Surely a better choice because home heating costs are still much higher than in the recent past and, more importantly, because far more people need help.

NEADA projects a 20% increase in the number of households that will apply for assistance this fiscal year. Nothing like this number can be served with the level-funded block grants. States will need swift infusions from the contingency fund.

But they won’t be enough. NEADA estimates that the block grant appropriation could provide 7.8 million households with grants–nearly 1.8 million fewer than the projected number of applicants. If grants average $523, as NEADA expects, the contingency fund could cover only about 1.2 million.

A New York Times editorial recommends a supplemental appropriation when Congress returns. As it says, $2.5 million would cover the applicants who will otherwise be left in the cold.

That would be chump change in a budget that’s well over $3.5 trillion. But it could be a tough sell anyway. The White House and the Congress will be focused on job creation. And we’re hearing alarms about the deficit–from Democrats as well as Republicans.

I just wish our leaders could hear, as I do, the sirens screaming down the street to the low-income housing complex a couple of blocks away. Every winter, they’re a sad reminder of how we won’t put our bucks behind our best intentions.