Since 2000, rents across the U.S. have risen while the number of Americans who need low-priced housing has increased. These two opposing trends have conspired to deprive a segment of consumers made up of low-income households the opportunity to find affordable housing. However, this might be different for those who are interested in housing development in a different country such as Singapore. If you are interested in finding out more about overseas housing development, you can learn more here.
According to a new report from the Urban Institute, only 28 adequate and affordable units nationwide are available for every 100 renter households with incomes at or below 30 percent of the area’s median income.
“Not a single county in the United States has enough affordable housing for all its extremely low-income renters,” the report states. “The number of affordable rental homes for every 100 (extremely low-income) renters ranges from 7 in Osceola County, Florida, to 76 in Worcester County, Maryland.”
The Urban Institute’s research shows how the number of extremely low-income households around the nation has grown since 2000. At the same time, federal housing-assistance programs have grown, but not nearly enough to keep up with need. The analysis is based on data from the Census Bureau and the U.S. Department of Housing and Urban Development (HUD).
For example, in Pulaski County, Arkansas there are about 15,000 families that meet the criteria for extremely low-income households in 2013 (earning no more than $18,650 for a family of four). Without federal assistance, none of these poor families in Little Rock would have access to affordable housing. But even with assistance, only 24 extremely low-income families out of every 100 can find safe, affordable rental housing in Little Rock.
Most Rely on HUD Assistance
Extremely low-income households increasingly rely on assistance from HUD: More than 80 percent of affordable rental homes for extremely low-income families are provided through assistance from HUD.
Without subsidies, it is nearly impossible to build and operate rental housing that is affordable to extremely low-income renters in most markets, the Urban Institute’s report says. Developers cannot produce developments targeted to extremely low-income renters because revenue streams from rents is too low to cover the costs of maintaining the property and to pay back the debt incurred in development. Additionally, building homes is never cheap. From sourcing all of the materials and workers to getting the site assessed for security and safety, housing development projects are never cheap. However, it’s extremely important that project owners get the site assessed before they begin the building. By making use of the concrete scanning services that companies like safe2core offer, sites can be assessed for multiple things that may be obstructing the construction underneath the land. After ensuring that there are no obstructions, the building can usually go ahead. However, this is where a lot of money needs to be spent, which is why housing developers struggle to rent their homes out for low-income families as they wouldn’t be making money.
Furthermore, the largest subsidy source for low-income housing development – the Low-Income Housing Tax Credit – is designed to make units affordable to households with incomes at 50–60 percent of area median income — that’s up to twice the 30 percent level of extremely low-income renters.
HUD’s rental assistance programs are increasingly the only source of affordable housing for extremely low-income renters in many areas,” the report states. “Unlike other safety net programs – like Social Security, food stamps, Medicaid, or Medicare – housing assistance is not available to all eligible applicants; only 24 percent of the 19 million eligible households receive assistance. As a result, millions of low-income individuals and families face serious challenges ranging from severe cost burdens to overcrowding to homelessness.