Housing Crisis Fact Sheet


September 6, 2006
Housing Crisis Fact Sheet
NLIHC Housing Action Agenda
Fall 2006

Misplaced Federal Budget Priorities

In 2005, the federal government spent just over $39 billion on housing assistance for low income Americans. This figure is expected to be 19% lower in 2011, if plans to trim housing assistance are fully implemented. Yet, the federal government also paid $121 billion in tax expenditures in 2005 – more than three times the amount spent on housing assistance – to subsidize homeownership through mortgage interest, capital gains, and property tax deductions.

These deductions disproportionately serve the homeowners with the highest incomes. When both housing assistance and tax benefits are taken into account, the poorest one-fifth of American households – those earning less than $19,000 per year – will receive approximately $34 billion in housing subsidies in 2006. By way of contrast, the richest fifth of American households (those earning over $92,000) will receive approximately $94 billion in subsidies, nearly three times more than the poorest fifth and accounting for roughly half of all housing subsidies distributed in 2006.

NLIHC. (forthcoming). Federal housing subsidies: A policy of inequity.

An Insufficient Supply of Affordable Housing Units

In 2003, there were nearly 2 million fewer rental units affordable at 30% of the area median income, the top threshold for what HUD defines as extremely low income (ELI), than there were renter households in this income category. This “absolute shortage” of apartments affordable to the lowest income Americans increased by more than 200,000 between 2001 and 2003.

Because many units affordable to these households were occupied by households with higher incomes and therefore are not available to meet the housing needs of ELI households, the effective shortfall of units is actually closer to 5 million units nationwide. In 2003 there were just 42 units of housing that are both available and affordable for every 100 ELI renter households in America.

NLIHC. 2006. The Rental Housing Affordability Gap: Comparison of 2001 and 2003 American Housing Surveys.

Insufficient Wages Keep Housing Out of Reach

Today, an individual working full-time, 40 hours a week 52 weeks a year, at the locally prevailing minimum wage cannot earn enough to afford the Fair Market Rent of a one-bedroom apartment in any county in the U.S. There is not a single metropolitan area in the country where he or she can afford an efficiency apartment.

NLIHC. 2005. Out of Reach: 2005.

The federal minimum wage has not increased since September 1997, while rents and utilities have increased by 34% and 48%, respectively, in the last nine years. According to the most recent estimates nearly 2 million individuals are employed at an hourly rate equal to or less than the federal minimum wage of $5.15. Over 11 million households reported income less than or equal to the earnings of one worker working 40 hours a week 52 weeks a year at their state’s minimum wage.

US Department of Labor and NLIHC Tabulations of the 2004 ACS

Low Income Renters Disproportionately Impacted by Hurricane Katrina

An estimated 302,000 housing units were severely damaged or destroyed by Hurricane Katrina in the fall of 2005. Approximately 216,000 units - an astounding 71% of the total - were affordable to low income households, and the overwhelming majority of these units were in the rental sector.

Hurricane Katrina severely damaged or destroyed more than 22,000 rental units affordable to extremely low income (ELI) households, further exacerbating the well-documented shortage of units affordable to those with the fewest resources.

NLIHC. 2005. Research Note #05-02: Hurricane Katrina’s Impact on Low Income Housing Units.

Local Data Provided by NLIHC