On April 26, 2011 the Joint Center for Housing Studies at Harvard University released a study entitled America’s Rental Housing: Meeting Challenges, Building on Opportunities” discussing the growing scarcity of affordable rental housing for moderate- and low-income Americans. Highlights say that falling incomes, a reduction in affordable rental units, and increased competition from higher-income renters have made it significantly harder for low-income renters to find affordable housing. Increased housing costs have left renters with less disposable income to spend on food, education, and health care. The problem is expected to worsen as the economy is likely to “push up rents faster than renter incomes recover.” The study notes “while rental housing is the home of choice for a diverse cross-section of Americans, it is also the home of necessity for millions of low-income households.”
The extensive study explains that nearly three quarters of all renters have incomes below AMI for households throughout the country with 41 percent of renters having incomes in the bottom income quartile. Statistics like this underscore the “critical importance of an adequate supply of affordable rental housing.”
The study goes on to explain that at present there are up to 7 million federally-assisted rental housing units throughout the country but that this supply only serves approximately one-quarter of the lowest-income renters eligible for federal assistance. The Housing Credit program is credit in the study as standing “nearly alone in replenishing the affordable stock, supporting both new construction and substantial rehabilitation of existing properties including older assisted developments.”
Further, with respect to tax reform, the study states “Plans for addressing the federal deficit have included eliminating all tax expenditures, putting the LIHTC program in jeopardy. Debates over the LIHTC program are not new. Since the program’s inception in 1986, questions have been raised about how shallow a subsidy it provides, how efficient it is, and how its terms compare with competing business tax credits that have since been created. Although a series of important reforms were created in 2008 to improve the efficiency and flexibility of the program, these changes have to be fully implemented because of the disruptions caused by the financial crisis. But unlike previous project-based approaches, the Low Income Housing Tax Credit program has sound financial underpinnings and a track record of success in delivering rental housing assistance.” (Page 39 of the report.)
The study can be found in its entirety at http://www.jchs.harvard.edu/publications/rental/rh11_americas_rental_housing/AmericasRentalHousing-2011.pdf