Key facts
- The poorest individuals in the U.S. face significant housing insecurity, with millions of extremely low-income households lacking affordable options.
- A substantial number of designated affordable housing units are sitting empty because their rents are too high for the poorest residents.
- The majority of affordable housing financed in recent years targets those earning 50% or more of an area's median income, leaving the most vulnerable behind.
- The Low-Income Housing Tax Credit program, a key federal initiative, is criticized for its complexity and for not adequately serving the extremely low-income population.
- In cities like Austin and Denver, vacancy rates for affordable housing are rising as rents approach market-rate levels, creating competition for renters.
The poorest individuals in the United States are struggling to find housing, even as a significant number of low-income units sit empty. This paradox arises because many affordable housing units, particularly those financed through programs like the Low-Income Housing Tax Credit, are designed for individuals earning 50% or more of an area's median income, leaving those with extremely low incomes unable to afford them.
Nationwide, there are only about 4 million affordable rental units available for 11 million extremely low-income renter households. These households, often earning below the federal poverty line or 30% of the median income, frequently spend over half their income on rent and utilities, leaving little for other necessities. The Low-Income Housing Tax Credit, while having financed millions of units over 40 years, is criticized by some experts for its complexity and cost, with suggestions that direct tenant subsidies like housing vouchers would be more efficient.
However, housing developers argue that without substantial subsidies, it is not economically feasible to create units for extremely low-income people, as their expenses often exceed the rent these individuals can pay. Meanwhile, in cities like Austin, Denver, and Portland, rents for affordable units targeting 60% of the median income are approaching market rates. This leads some potential renters to opt for market-rate apartments due to less stringent application processes and faster approval times, contributing to rising vacancy rates in designated affordable housing.
In Austin, nearly 16% of affordable housing units are vacant, totaling over 4,500 units. Similarly, Denver is experiencing vacancy rates of 13% for units designated for 60% AMI and 21% for those at 80% AMI, according to data from CoStar and the Colorado Housing Finance Authority.