Extremely low-income households, housing affordability and the Great Recession

Abstract

The effects of the Great Recession on housing equity and homeownership have been well-documented. However, we know little about how rental households fared and the efficacy of housing subsidies in addressing affordability gaps. This paper examines the extent to which rental housing became less affordable for Extremely Low-Income (ELI) households – those earning less than 30% of the Area Median Income (AMI). I then run regression models to determine the local characteristics most strongly associated with larger affordability gaps, with a focus on whether housing subsidies are effective at combating such gaps. Rental affordability gaps became more pronounced during the Great Recession. In nearly 70% of the counties in my sample, there was an increase from 2007 to 2010 in the number of ELI households per affordable rental unit. Across the country, the increase was 17%, a dramatic increase in only three years. There is considerable variation across the country, with acute affordability crises often concentrated in the South, particularly Florida. Regression models provide compelling evidence that housing vouchers, public housing, and project-based Section 8 subsidies play an important role in limiting the extent to which large numbers of ELI households are competing for a shortage of low-cost rental units. However, these programmes do not respond quickly to local needs – such as those brought about by the Great Recession. A pilot study where local housing authorities had funding to be more agile and responsive would be an important step toward crafting better policy.

The COVID-19 Pandemic and the Rental Market: Evidence From Craigslist

“…Indeed, in both Manhattan and Brooklyn, new lease signings continued to fall through June 2020 and the vacancy rate of rental units climbed to levels not seen in over a decade ( Haag, 2020 ). However, past work has shown that rental market indicators like listing volume, vacancy rates, and rental price remain relatively sticky during economic downturns and do not necessarily covary ( Genesove, 2003 ; Lens, 2018 ; also see Gabriel & Nothaft, 2001 ).…”

Rent burden determinants in hot and cold housing markets of Davidson and Shelby counties, Tennessee

“…Moreover, some scholars have illustrated an acute housing affordability crisis in the South, especially in Florida that has been attracting young as well as retired/senior residents due to its warmer climate and tax‐friendly policies 5 . Other hotspots of decreasing affordability include the metropolitan statistical areas (MSAs) of Houston, Atlanta, and Baton Rouge (Lens, 2018).…”

Rental tenure and rent burden: progress in interdisciplinary scholarship and pathways for geographical research

“…Indeed, rent burden has become more widespread across the U.S. and its magnitude has been increasing since the Great Recession (ibid). Other scholars have also acknowledged and analyzed the aggravation of rent burden since the recession (Dawkins & Jeon, 2018 ; Edmiston, 2016 ; Lens, 2018 ), and in 2015, almost a half of U.S. tenants paid more than 30% of their income on rent (Gabriel & Painter, 2020 ). Thus, studying the issue of rent burden is crucial, especially holistically and from a geographic perspective across diverse settings, not only within the American context, but also across the world.…”

“…American scholars have examined rent burden among renters in low-income housing tax credit (LIHTC) units (O’Regan & Horn, 2013 ; Williamson, 2011 ), participants in the housing choice voucher program, HCVP (Dawkins & Jeon, 2018 ; Mast, 2014 ; McClure, 2005 ), or both (Lens, 2018 ). For example, O’Regan and Horn ( 2013 ) considered LIHTC renters in 18 states and concluded that the program helped its tenants to reduce rent burden relative to people with comparable incomes.…”