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The Gap: A Shortage of Affordable Homes, a new report recently released by the National Low Income Housing Coalition (NLIHC), finds a state-wide shortage of 674,648 million affordable and available rental homes for extremely low-income renter households – those with incomes at or below 30% of AMI. This is a 14% increase from last year’s report. Many of these households are severely cost burdened, spending more than half of their income on housing. Severely cost burdened poor households are more likely than other renters to sacrifice other necessities like healthy food and healthcare to pay the rent, and to experience unstable housing situations like evictions.

Key facts

  • Texas ranks the sixth-worst state in the U.S. for affordable housing for extremely low-income renters.
  • Austin, Dallas, and Houston rank third, fourth and fifth for worst metropolitan areas in the country.
  • Twenty-two percent of all Texas rental households are extremely low income, and 79% of them are severely cost burdened (spend over half their income on housing).
  • While only 25 rental units per every 100 are affordable and available for extremely low-income household, 101 rental units per 100 households are affordable and available for low-income households (51-80% AMI).
  • There’s a shortage of 864,338 affordable and available units for households living at or below 50% AMI.
  • Between 2019 and 2021, the shortage of affordable and available rental homes for very low-income renters (at or below 50% AMI) worsened by more than 164,591 units, or 24%.

Less supply of affordable & available rental housing for the lowest-income texas households since 2019

The dearth of affordable and available homes for very low-income renters impacts all states and the 50 largest metro areas, none of which have an adequate supply for the lowest-income renters.

  • Extremely Low- Income (0-30% AMI) Renters: The shortage of affordable rental housing primarily impacts renters with extremely low incomes. Extremely low-income renters in the Texas face a shortage of 674,648 affordable and available rental homes, resulting in only 25 affordable and available homes for every 100 extremely low-income renter households. This is a 14% increase from 2019.
  • Very Low-Income (31-50% AMI) Renters: The relative supply of affordable and available rental homes improves as incomes increase, because more housing becomes available to renters at higher incomes.

Affordable and Available Homes per 100 Renter Households & Percentage Decrease from 2019:

  • 25 per 100 Extremely Low-Income Households (0-30% AMI): -14%
  • 44 per 100 Very Low-Income Households (31-50% AMI): -14%
  • 95 per 100 Low-Income Households (51-80% AMI): – 6%
  • 104 per 100 Middle Income Households: (81-100% AMI): -4%

Within Texas, the shortage of affordable and available rental homes starts to dissipate when moving higher up the income ladder. Texas has a shortage of affordable and available rental housing for extremely low-income and very low-income renters, however, there’s almost a surplus of housing for households at or below 80% AMI. The fact that there are enough homes for higher-income households obscures the shortage for the lowest-income households. Therefore, future affordable housing development should focus on serving more very- or low-income households since that is what is needed most.

Housing shortages for low-income renters by geography

The affordable housing crisis affects communities statewide, as no metropolitan area (MSA) has an adequate supply of rental housing affordable and available for low-income households (at or below 50% AMI). Every major metropolitan area in the U.S. has a shortage of affordable and available rental homes for extremely low-income renters. The absolute shortage ranges from 77,618 rental homes in the San Antonio-New Braunfels MSA to nearly 256,485 in the Austin-Round Rock MSA.

Texas has three of the top 10 metropolitan areas where extremely low-income renters face the most housing shortages. The Austin & Dallas MSAs tie for the 3rd most severe housing shortages (where there are 16 affordable and available rental homes for every 100 extremely low-income renter households), followed by the Houston MSA where there are 19 affordable and available rental homes for every 100 extremely low-income renter households. The absolute shortage ranges from 77,618 rental homes in the San Antonio-New Braunfels MSA to nearly 256,485 in the Austin-Round Rock MSA.

Most Severe Housing Markets

Housing cost burdens

Households are considered housing cost-burdened when they spend more than 30% of their incomes on rent and utilities. They are considered severely cost-burdened when they spend more than 50% of their incomes on their housing. Because cost-burdened households spend a higher share of their income on housing, they have less to spend on other necessities, such as food, childcare, transportation, and healthcare.

Extremely low-income renters are far more likely than others to experience severe housing cost-burden. Ninety percent of all extremely low-income renters experience housing cost-burden and 79% are severely cost-burdened.

Renters with higher incomes are far less likely to experience severe cost-burdens. Eighty-four percent of very low-income households are housing cost-burdened, but far fewer (36%) experience severe cost-burdens compared to extremely low-income renters. The share of low-income and middle-income renters who are severely cost burdened is 5%, and 1%, respectively.

Summary

These findings underline the importance of largescale, long-term policy solutions to meet the housing needs of renters with the lowest incomes. Any reduction in federal affordable housing resources will only exacerbate the existing shortage, which is already acute. The federal and state government must preserve and expand the stock of deeply affordable housing, expand housing vouchers to all eligible households, invest in a housing stabilization program that provides renters with emergency funds when they experience unexpected financial shocks, and strengthen and enforce renter protections. State and local governments also have an important role to play in improving access to affordable housing, including reforming zoning and reducing other land-use restrictions to bolster affordable housing development. These local reforms are necessary, but insufficient without federal resources, for eliminating the shortage of affordable rental housing for the nation’s lowest-income renters.