Housing Report Highlights Affordability Challenges
A surge in consumer prices has made the affordability challenge for renters even more severe, particularly for low-income households and households of color, according to The Joint Center for Housing Studies of Harvard University (JCHS) annual report, “The State of the Nation’s Housing 2022. As a result, finding affordable housing has become more critical as emergency pandemic aid runs out.
In 2020, the nationwide share of cost-burdened households paying more than a third of their income for housing climbed 1.5 percentage points to nearly 30 percent, according to the report. Housing cost burdens continued to be most acute at lower incomes, with 51.7 percent of renter households with an annual income of $30,000 or less paying more than 50 percent of their income for housing. The report also shows that in the first quarter of 2022, rents for apartments in professionally managed properties rose an average of 12 percent year-over-year, with increases in several metro areas exceeding 20 percent.
Pandemic Aid Runs Out
JCHS finds that federal rental aid remains one of the most vital ways to expand the U.S. supply of affordable homes and ease housing cost burdens among vulnerable households. The majority of the 4.5 million households receiving HUD assistance are older adults (39%), families with children (28%), and people with disabilities (21%). HUD’s support lowers the average out-of-pocket rental costs for households to $360.
And while pandemic programs like the Emergency Rental Assistance Program were successful in keeping millions in their homes, the JCHS report says there’s a need for substantial, consistent investment in affordable housing. While eviction and foreclosure filings were down during the pandemic, numbers have climbed once more as government protections end. Foreclosure filings increased by 39 percent in the first quarter of 2022, and eviction filings are just 2.5 percent below the 2012–16 average as compared to the August 2021 level of 54 percent below that average.
Demographics and Climate Change
The report says investments in affordable housing must also consider demographic shifts. The majority of the current housing supply can’t meet the accessibility needs of an aging population and can’t withstand the impacts of extreme weather events due to climate change. According to data from CoreLogic, in 2021 extreme weather events damaged some 14.5 million residential properties, with an estimated $56.92 billion in property damage. Furthermore, for natural disasters declared in 2021, FEMA provided $2.2 billion for rental assistance, home repairs, home replacements, and property loss coverage for nearly 850,000 households.
The report also highlights the need to preserve existing affordable housing. JCHS cites the Biden administration’s recently released Housing Supply Action Plan as a starting point to address the shortage of affordable housing at the federal level. The Housing Supply Action Plan includes launching and supporting pilots that expand lending products tailored for off-site construction and housing production strategies that have the potential to increase supply in constrained markets. The plan also includes proposals to support state and local jurisdictions in easing their housing affordability and supply challenges by easing regulatory barriers to housing production.