According to HUD’s Worst Case Housing Needs 2011: Report to Congress, the number of renters with worst case housing needs grew to a record 8.48 million in 2011, from a previous high of 7.10 million in 2009. There has been a 43% increase in worst case housing needs since 2007. HUD released the full report on August 16, after having released an executive summary of the report in February (see Memo, 2/22).

“Worst case housing needs” are those of very low income (below 50% of Area Median Income) renters who do not receive government housing assistance and who either spend more than half of their income on rent, live in severely inadequate conditions, or who face both of these challenges. The vast majority of households with worst case housing needs have severe housing cost burdens, while 3% live in severely inadequate conditions.

The gap between worst case housing needs and assisted households is the highest ever recorded, with two worst case housing needs households for every one assisted household.

No household type, demographic group, or region was unaffected by the growth of worst case housing needs from 2009 to 2011. Nearly 4 in 10 (38.2%) worst case housing needs households in 2011 were families with children, followed by non-family renters (35%) and the elderly without children (17.3%). While very low income families with children are a high proportion of worst case housing needs households, only one in four very low income families with children receive assistance. Forty-eight percent of new worst case housing needs households were among white, 28% among Hispanic, and 13% among black households.

On the national level, 44% of very low income households have worst case housing needs; this rate is slightly higher in the West and slightly lower in the Northeast and Midwest. Further, the prevalence of worst case housing needs is slightly higher in suburbs and somewhat lower in non-metropolitan areas. Housing assistance plays an important role in reducing worst case housing needs but is relatively less common in suburbs where only 18.4% of very low income households are assisted.

Worst Case Housing Needs 2011 identifies household formation, renter share, renter income losses, renter assistance gap, and affordable unit competition as contributing factors to the growth in worst case housing needs. The likelihood of a very low income renter facing worst case housing needs increased from 41.4% in 2009 to 43.9% in 2011. The increase in worst case housing needs is explained primarily by the increased number of renters. The report suggests that the number of renter households increased because of foreclosures and unemployment, forcing previous homeowners to turn to the rental market. New household formations also added more renters. Together, new household formations and share of renters added 1.38 million in worst case housing needs (53% of the total increase from 2009 to 2011).

Competition for affordable housing also continued to grow—higher income renters occupy 38.4% of the units affordable to ELI renters, 34.4% of the units affordable to VLI renters, and 29.9% of the units affordable to LI renters.

The nation no longer has enough affordable units for renters at the lowest incomes even if allocation were perfect. The vacancy rate for units affordable to ELI households is at an all-time low with just 5.4% vacant (compared to 13.1% in 2009) and this at-risk population faces the tightest market since HUD began to measure worst case housing needs in 1985. The report concluded by raising the importance of housing vouchers to assist the 8.48 million households with worst case housing needs.

This report is the 14th in the series that HUD prepares for Congress using the latest American Housing Survey to discuss trends and causes of worst case housing needs.

The full report is available here: http://bit.ly/YpkP4E