The nationwide shortage of housing inventory is a daily topic in the industry in 2018, with accelerating home prices combining with inventory shortfalls to make it very difficult for many potential homebuyers to find an actual home to purchase. The problem also extends to the rental side of things, with rent prices also increasing and renting becoming an increasingly popular option for many would-be homebuyers who decide renting is a better or more economically feasible option than saving up for a downpayment on a home. However, those inventory shortages are hitting the low-income segment of the population particularly hard, according to a report by the National Low Income Housing Coalition (NLIHC).
The NLIHC has released its 2017 Gap Report, spotlighting the widespread shortage of affordable housing within the U.S. rental market. The Gap report defines “low-income renters” as those “whose income is at or below the poverty guideline or 30% of their area median income.” The NLIHC report found that, on average, only 35 affordable and available rental homes exist for every 100 extremely low-income renter households. Those statistics vary from market to market, ranging from 15 available and affordable rental homes for every 100 renters in Nevada, but coming in at 61 for every 100 renters in Alabama.
The NLIHC report found that the 11.4 million extremely low-income (ELI) renter households accounted for 26 percent of all U.S. renter households, and 10 percent of all households overall. The U.S. marketplace is short 7.4 million affordable and available rental homes for ELI renters. To make matters worse, the report states that 71 percent of ELI renter households are “severely cost-burdened,” spending more than half of their income on rent and utilities.
States with the greatest percentage of severely cost-burdened ELI renter households include Nevada (83 percent), Florida (79 percent), California (77 percent), Oregon (76 percent), Hawaii (75 percent), Colorado (75 percent), and Virginia (75 percent). The degree of the shortages varies significantly by state, but the problem is nationwide. Wyoming is short 8,731 available and affordable rental homes for ELI renters. California, already known to be suffering severe inventory shortages across the board, is short by 1,110,803.
According to the report, The states where ELI renters face the greatest challenge in finding affordable and available homes are Nevada, with only 15 affordable and available rental homes for every 100 ELI renter households, California (21 homes for every 100 ELI renter households), Arizona (26 homes for every 100 ELI renter households), Oregon (26 homes for every 100 ELI renter households), Colorado (27 homes for every 100 ELI renter households), and Florida (27 homes for every 100 ELI renter households).
You can read the full NLIHC Gap report by clicking here.