HUD Report Paints Bleak Picture for ‘Worst-Case’ Housing Needs

A recently released report by HUD has found dramatic increases in worst-case housing needs across demographic groups, household types, and regions. HUD defines “worst-case needs” as very low-income families who do not receive housing assistance and who pay more than half of their monthly income for rent, or live in severely substandard housing.

Worst-case needs rose more between 2007 and 2009 than in any previous two-year period since 1985, with an almost 42 percent increase since 2001, according to “Worst Case Housing Needs 2009: A Report to Congress.” The following are a few key findings from the report:

• Every racial or ethnic group experienced increases in worst-case needs in 2009; however, Hispanic renters experienced the largest increase in incidence (8 percentage points) from their 2007 rate.
• Families with children represented the highest proportion of households (39 percent). The number of families with worst-case needs grew by 550,000 between 2007 and 2009.
• Higher-income families are competing for a limited number of affordable rental units, further driving down already low vacancy rates for the lowest-rent units. Only 36 of every 100 extremely low-income renters have affordable units available to them.
• The share of worst-case needs among very low-income renters with disabilities increased from 37.5 percent to 40.7 percent between 2007 and 2009.
• The availability of affordable rental housing varies across regions of the country. The supply is most scarce in the West, where only 53 units are available per 100 very low-income renter households, compared with 65 in the South, 66 in the Northeast, and 87 in the Midwest.

While the homeownership crisis and struggling economy played a key role in the rising number of worst-case needs, the HUD report points to three main factors as key contributors to the 2007-2009 increase:

Renter income losses. HUD attributes more than a third (35 percent) of the increase in worst-case needs to shrinking incomes caused by the rise and continuing severity of unemployment.

Rental assistance gap. Nineteen percent of the increase in worst-case needs comes from the lack of rental assistance. The amount of available housing assistance has not increased, while the number of very low-income renters has surged.

Competition for affordable units. The biggest contributor to the increase in worst-case needs has been the competition for affordable units (41 percent), which has led to displacement, absorption of vacancies, and upward pressure on rents, the report states.

HUD points out that these factors are likely to ease as the economy rebounds; however, the need to prioritize assisted housing in national policy deliberations is critical.