03/13/2013 - Out of Reach – Report Reveals Growing Affordability Gap

USICH and the National Low Income Housing Coalition (NLIHC) share the goal of preventing and ending homelessness by expanding the supply of affordable rental homes. We know that meeting our goal requires high-quality research that tells us the depth of homelessness and shows the progress we’ve made towards ending it. Every year, Out of ReachNLIHC’s annual report on the housing wage—provides just this kind of research. We know from this report that the cost of housing is simply too high for our lowest income neighbors to afford. Out of Reach helps us define the problem and points us toward solutions, and I was honored to provide the preface to this year’s report.

I know that we can solve homelessness; the pathway to doing so is clear. As a nation, we’ve made progress against those goals. Specifically, we have decreased Veterans homelessness by 17 percent since 2009 and for the first time ever, chronic homelessness is below 100,000. However, homelessness among families has increased, and over one million children in schools lack a stable place to call home.

As Out of Reach shows, an increasingly tight rental market and the drop in the number of affordable rental units available to extremely low income households is the greatest barrier to achieving our vision that "no one should experience homelessness, no one should be without a safe, stable place to call home.”

The data in Out of Reach highlights the growing pressures that low-income families and individuals face to find and secure affordable and available rental housing:

The report indicates that the rental market has become tighter and more competitive in the past few years.  As homeownership rates have declined, the number of renter households rose by one million households in 2011, the largest single-year increase since the early 1980s.   Meanwhile, the cost of rental housing has increased.  As noted in the report, while renter households earn an average of $14.77 per hour, the actual ‘Housing Wage’ needed to afford market rents is $18.79 per hour.

For the lowest-income households, known as ‘Extremely Low Income’ households, the situation is even more dire.  Out of Reach reports that the number of ELI households rose to 10.1 million households, and ELI households now represent one-quarter of all renters.  

It’s without question that these pressures on the rental market, particularly at the lower-cost end of the market, have contributed to rising homelessness among families. 

With funding for housing assistance threatened by budget cuts each year, federal housing assistance programs are less and less available for struggling families.  Now, the sequester threatens to stop our progress and send us back in the wrong direction by triggering blunt and indiscriminate cuts to vital programs.

These cuts are a devastating blow to programs – especially emergency shelter, supportive housing, affordable housing, and mental health and outreach programs – that are critical to our success in ending homelessness.

According to HUD’s analysis the sequester, if fully implemented, could result in:

  • 125,000 families losing their Housing Choice Vouchers,
  • More than 100,000 Americans who are currently experiencing homelessness losing access to shelter and transitional housing,
  • Vital community development programs like CDBG and HOME, key resources in affordable housing rehabilitation and development, will also be cut.

Because of austerity measures like the sequester, it is critical that we protect and preserve the affordable housing resources we do have and work to leverage any federal investments we can with state and local community leaders.  This Administration firmly believes that investments in affordable housing are a cost-effective approach, creating significant cost savings in housing and healthcare in the long-term.

Perhaps the best example of the Administration’s commitment to housing for lowest-income families was in Recovery Act-funded – Homelessness Prevention and Rapid Rehousing Program:

  • Prevented hundreds of thousands of families from falling into longer-term homelessness by using rapid re-housing methods to keep families in affordable units instead of entering shelter system
  • Fundamentally changed the way communities and the government respond to the crisis of homelessness – moving towards crisis response systems
  • One of best examples of how the federal government, working in collaboration with states and local partners, can quickly mobilize large-scale response to a crisis.

The Administration has also significantly increased resources to end homelessness among Veterans.  The centerpiece of this effort is the HUD-VA Supportive Housing program (HUD-VASH) where HUD’s rental assistance vouchers are paired with VA case management services.  Since 2008, more than 48,000 vouchers have been awarded, ending homelessness for the most vulnerable Veterans experiencing chronic homelessness. 

HUD-VASH is also a model for how the Federal government is collaborating across agencies to link housing and services together.  For the most vulnerable individuals and families experiencing homelessness, flexible supportive services linked to housing is critical to assist with retaining and maintaining housing.  Recognizing this, the Administration has focused efforts on increasing access to services that can be linked to housing to help individuals and families successfully exit homelessness:

The Affordable Care Act opens the door for a new funding source for states and communities to pay for supportive services and for all low-income Americans to get comprehensive health care:

  • Medicaid expansion, if enacted in all states, will ensure that nearly 100% of people experiencing homelessness are eligible for health care based on income alone, not disability status
  • This expansion will help stabilize low-income families and individuals with high health care needs, and may cover supportive services like case management and behavioral health care
  • Provisions in ACA focus on health outcomes and the quality of care, not just encounters and procedures, which will help lower the cost of health care.

The Administration is also using the Frank Melville Supportive Housing Act of 2010, for HUD and HHS to work together to link housing and health care together through the new Section 811 Project Rental Assistance Demonstration, awarding $98 million in housing assistance to 13 states for housing for those with disabilities:

  • Sets up collaboration between state housing finance agencies and state Medicaid offices to ensure that supportive services in housing are paid for by innovative Medicaid systems
  • States have the opportunity to be innovators on how to best link housing system with the health care system.

The National Housing Trust Fund is an example of how the federal government could work in partnership with states and communities to protect affordable housing in the future so that the gap of affordability does not continue to widen.

Just as USICH is a leader in the national fight to end homelessness, NLIHC is leading the push for innovative policy solutions to the ongoing housing problems addressed in research from both organizations. One of the strategies for preventing and ending homelessness that USICH focuses on in Opening Doors is to increase access to stable and affordable housing, and funding the National Housing Trust Fund is listed as one way to achieve that goal.  Building, preserving, and rehabilitating affordable rental homes through a mechanism like the Housing Trust Fund, an idea backed by the Administration, would advance this work.  This would represent the first new federal housing construction program to address the housing needs of the lowest income Americans in 30 years. These are the households in the greatest need of decent, affordable housing, and the households at the greatest risk of homelessness.

A majority of Americans agree that homelessness is a problem that must be solved. There is a significant body of evidence that shows that affordable housing is a cost-effective and proven solution to homelessness. There is no better time than now to re-imagine federal housing policy and determine how to ensure that there is a dedicated source of funding for affordable housing production. Out of Reach proves that the affordable housing problem is real. It is time for all of us—advocates and policymakers alike—to collaborate on solutions. We need to act with great urgency, now, to ensure that all children, youth, and adults have a stable place to call home.

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