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On August 21, HUD released an Executive Summary of its forthcoming Worst Case Housing Needs 2023 Report to Congress, that examines trends in and causes of worst case needs using the most recent data from the 2021 American Housing Survey (AHS). According to the summary, HUD estimates that a record-high 8.53 million very low-income renter households had worst case housing needs in 2021, surpassing the previous high of 8.48 million in 2011, following the 2007-2009 recession. This is the highest number of households with “worst case housing needs” since HUD began collecting these data in 1978.

A household with “worst case needs” has been defined as a very low-income renter household (earning less than 50 percent of the area median income) who lacks housing assistance and also has a severe housing cost burden (housing expenses that exceed half of the household’s income), a housing unit with severe physical inadequacies, or both. Housing (un)affordability is a much more prevalent problem than housing quality, as fewer than 3% of worst case housing needs cases in 2021 could be attributed to severely inadequate housing quality.

As the U.S. population expanded between 1978 and 2021, the nation’s very low-income renters increased by nearly 81 percent, from 10.7 million to 19.3 million—but HUD’s estimate of households experiencing worst case needs increased 115 percent, from 4.0 million to 8.5 million, based on the most recent report.

The rising prevalence of worst case needs among very low-income renters reflects the increasing dominance of housing cost burden rather than housing inadequacy as a cause. The percentage of very low-income renters with severely inadequate housing was 9.0 percent in 1978, decreasing to 3.4 percent in 2021. The share of very low-income renters experiencing severe cost burdens has had the opposite trajectory, increasing from 30 percent in 1978 to 52.9 percent in 2021. The percentage of very low-income renters with moderate cost burdens of 30 to 50 percent of income increased during the 1990s but then began falling, and since 2000, the percentage of renters experiencing severe cost burdens has eclipsed the percentage of renters experiencing moderate cost burdens.
The report attributes the notable increase in worst-case housing needs to household formation (new households formed as a result of population increase), the widening of the rental assistance gap for eligible very low-income households, and the continuing shortage of affordable rental housing. Reductions in worst case needs generally result when economic growth improves household incomes, when the production of affordable housing is sufficient to reduce market rents, or, alternatively, when the availability of rental assistance increases.
To address worst case housing needs, a broad strategy at the federal, state, and local levels has long been needed to continue to grow the economy, support market production and access to affordable homes, and provide rental assistance to the most vulnerable households.