HUD Identifies Increase in Worst Case Housing Needs

By &
3 min read

Tax Credit Advisor January, 2006: The U.S. Department of Housing and Urban Development (HUD) has identified an increase in households with severe housing needs in its latest report on the subject, documenting a worrisome trend.

The study, which HUD released in December, found that in 2003 a total of 5.18 million households had “Worst Case Housing Needs.” HUD defines such households as those that are without rental assistance and earn less than 50 percent of Area Median Income (AMI), and who pay more than half of their incomes on housing or live in severely inadequate units.

This is an increase of 3.4 percent from the 5.01 million worst-case households identified in a 2003 HUD report covering 2001. Since 1999, the recent numerical low point in worst-case households, when there were 4.86 million such families, the number of such households has grown by 6.6 percent. In 1995, there were 5.20 million households with worst-case needs, and in 1997, 5.38 million.

Worst case households as a percentage of total U.S. households have also risen steadily since 1999, when that number was 4.73 percent. In 2001, the percentage of worst-case needs households was 4.75 percent; in 2003 it was 4.89 percent (See chart).

HUD provided a wide-ranging analysis of worst-case housing needs. Types of households it identified as having worst cast needs are followed by the percentage that these households represented of the worst-case total in 2003.

Demographics of Worst Case Needs

  • Households with extremely low incomes (below 30 percent of AMI): 74 percent.
  • Households with children: 36 percent.
  • Elderly households: 22 percent.
  • Households with non-elderly members with disabilities: 10 percent.
  • Non-Hispanic White Households: 53 percent.
  • Non-Hispanic Black Households: 20 percent.
  • Hispanic Households: 20 percent.

Character of Worst Case Needs

  • Households with severe rent burden, not severely inadequate housing, as the only priority problem: 91 percent.
  • Households with worst-case needs living in severely inadequate housing: 3.9 percent (This is a decrease from 4.6 percent in 2001).

Geography of Worst Case Needs

  • Households in the South: 32 percent
  • Households in the West: 27 percent
  • Households in the Northeast: 22 percent
  • Households in the Midwest: 19 percent
  • Households in Central Cities: 49 percent
  • Households in Suburbs: 38 percent
  • Non Metropolitan Households:

Availability of Affordable Housing

The report also examined the availability of affordable rental housing, and how this affects households with worst-case needs. In 2003, it found, there were 78 rental units affordable to extremely low-income renters for every 100 of these households, but only 44 actually were available for these households. The remainder were occupied by higher-income households.

HUD’s measure of affordability is a broad gauge of housing stock sufficiency, and addresses whether there are enough housing units if they are allocated solely on the basis of cost, using the 30 percent of income standard. This housing stock includes both vacant and occupied units.

HUD measures availability of affordable units by assessing how many are accessible to households in a given income range. Because some households spend less than 30 percent of income on rent, they take up affordable housing that would otherwise be available to lower income renters.

The most recent “Worst Case Housing Needs” report is the eighth that has been released since HUD began issuing these studies in 1991.