FOR IMMEDIATE RELEASE Contact: Michele Anapol Center for Housing Policy (202) 466-2121 x226 manapol@nhc.org

HOUSING CRUNCH NOT JUST FOR HOMEOWNERS:
NUMBER OF WORKING FAMILY RENTERS PAYING MORE THAN HALF THEIR INCOME FOR HOUSING DOUBLES

New Study Details Severe Housing Problems Among Renters and Homeowners for the Nation and 31 U.S. Metropolitan Areas, Finds Concerns Not Confined Only to Coastal Cities

Washington, DC (August 30, 2007) – The number of low- to moderate-income working family renters paying more than half their income for housing has doubled – growing faster than the number of working family homeowners with this problem –according to a new study entitled The Housing Landscape for America’s Working Families 2007 conducted by the Center for Housing Policy. Specifically, the study found that the number of working family renters paying more than half their income for housing grew 103 percent from 1 to 2.1 million between 1997 and 2005. The number of working family homeowners paying more than half their income for housing increased at a significantly slower rate, rising 75 percent from 1.4 million to 2.4 million during the same time period. This study also takes an in-depth look at housing problems in 31 U.S. metropolitan areas and provides specific affordability findings for working family renters and homeowners in these metro areas (see related detailed affordability “Rankings” for metro areas in this release).

“This new study reveals that housing cost burdens have increased faster among America’s working family renters than among working family homeowners,” said John McIlwain, chairman of the Center for Housing Policy. “Over the past several months there has been a tremendous amount of attention given to the problems facing homeowners with subprime mortgages. While these problems are significant and this attention is deserved, it is important not to lose track of the serious housing problems facing renters.”

“A Closer Look”

Nationwide Findings

Analysis of America’s Housing Needs

Almost 40 million households in America meet the study’s definition of working families – those households that work the equivalent of a full-time job and earn at least the annual minimum wage of $10,712, but no more than 120 percent of the median income in their area. From 1997 to 2005 the number of working families with critical housing needs – that is, those that paid more than half their income for housing, and/or lived in severely dilapidated conditions – increased 73 percent. Specifically, some 5.2 million working families experienced critical housing needs in 2005 compared to 3 million in 1997.

As detailed earlier, the biggest change has been in the number of working family renters paying more than half their income for housing. Between 1997 and 2005, the number of working family renters and homeowners combined with severe housing cost burdens rose from 2.4 to 4.5 million – an increase of almost 87 percent. The share of renters living in dilapidated housing has dropped between 1997 and 2005, but dilapidated housing still is more likely to be a problem for renters than for homeowners.

Central Cities, Suburbs and Non-Metropolitan Areas:
Critical housing needs are not confined to central cities. In fact, in 2005, while nearly 40 percent or about 2.1 million of all working families with critical housing needs lived in central cities, a similar number, 2.2 million or 43 percent, lived in the suburbs. The remainder, less than 1 out of 5, lived in non-metropolitan locations. When comparing working family renters and homeowners with critical housing needs, 51 percent of working family renters lived in central cities compared to 28 percent of their homeowner counterparts. Approximately 38 percent of renters with critical housing needs lived in the suburbs compared to 48 percent of working family homeowners.

Regions:
Since 1997, the highest rates of critical housing needs have been found in the West – 1 in 6 working families – and Northeast – 1 in 7 working families. However, all four regions have seen rising rates of critical housing needs from 1997 to 2005. Although the Midwest continues to have the lowest rate of housing problems among working families at 10.1 percent in 2005, it is the region with the most dramatic growth in critical housing needs at 80.4 percent over the eight-year period.

31 U.S. Metropolitan Area Findings

Analysis

Although the housing problems of coastal cities often make headlines, the sharpest increases in the share of working families with critical housing needs are found in other parts of the country. These areas include Denver – up 162 percent between 1995 and 2004, Charlotte – up 86 percent between 1995 and 2002 – and other relatively affordable places such as Kansas City, Pittsburgh, Indianapolis and San Antonio. Sacramento is the only West Coast city where the rate of critical housing needs for working families increased by more than 60 percent over the time period studied.

In addition to measuring changes over time, the study measured the rate of critical housing needs among working families in each of the 31 metropolitan areas studied. This share varied widely, ranging from a high of 28 percent in Los Angeles to a low of 6 percent in Columbus, OH. While critical housing needs were most severe in the West Coast cities of Los Angeles, Anaheim and San Diego, and the hot East Coast markets of New York and Miami, significant numbers of working families in every metro area – including those in Atlanta, Denver and Indianapolis – pay more than half their income for housing. In several markets, such as Los Angeles, New York and Newark, substantial numbers of working families also live in severely dilapidated housing.

Rankings - 10 Least Affordable Metropolitan Areas by Category*
Working Families Paying More Than Half of Income for Housing

More Rankings* – Largest Percentage Increases in Critical Housing Needs** by Metropolitan Area

*The “Rental Market” and “Homeownership Market” rankings reflect the study’s calculations of the share of working families paying more than half of their income for housing in each metropolitan area, as measured in the most recent American Housing Survey data provided for each metropolitan area.

**The “Critical Housing Needs” and “Increases in Critical Housing Needs” rankings reflect the study’s calculations of the share of working families with critical housing needs in each metropolitan area, as measured in the most recent American Housing Survey data provided for each metropolitan area. Working family households that pay more than half their incomes for housing and/or live in severely dilapidated conditions have critical housing needs.

For all the rankings, and more on today’s announcement, please go to Housing Landscape.

Acknowledgements

The Center for Housing Policy gratefully acknowledges the funding of this study by Freddie Mac. The findings and conclusions presented in this study, however, are those of the Center and do not necessarily reflect the opinions of Freddie Mac.

Links to Additional Relevant Resources From the Center for Housing Policy:

Why Housing Matters: Housing’s Connections to Health and Education

Center for Housing Policy’s “Housing Solutions” Handbook (PDF)

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The Center for Housing Policy is the research affiliate of the National Housing Conference (NHC). In partnership with NHC and its members, the Center works to broaden understanding of the Nation’s housing challenges and to examine the impact of policies and programs developed to address these needs. Combining research and practical, real-world expertise, the Center helps to develop effective policy solutions at the national, state and local levels that increase the availability of affordable homes. To learn more please go to www.nhc.org.