RENTAL HOUSING 

ASSISTANCE— 

THE WORSENING 

CRISIS 

___________________________ 

A Report to Congress on 

Worst Case Housing Needs 

March 2000

Office of Policy Development and Research

U.S. Department of Housing and Urban Development

Analysts contributing to this report are Kathryn P. Nelson, Jill Khadduri, 

Marge Martin, Mark D. Shroder, Barry L. Steffen, and David Hardiman 


•	 Poor families living in the suburbs most frequently face worst case needs. Over one-third of 

worst case households live in the suburbs. Reflecting housing market pressures from population 

and job growth, declines in units affordable to extremely-low-income families were greatest in 

the suburbs during the 1990s. 

A wide range of market forces and other factors have contributed to the decline in affordable 

housing. A significant factor has been the simple economics of supply and demand: as the economy 

heats up, rents are rising at a faster rate than incomes of our poorest families. Another key factor was the 

lack of federal support for new rental assistance during a crucial four-year period covered by this report, 

from 1995-1998, when no additional units of rental assistance were enacted. 

Fortunately, that has changed. For the past two years in a row, Congress has approved new 

housing vouchers -- 50,000 in 1998 and another 60,000 in 1999. This year, the President’s FY 2001 

budget includes funds for an additional 120,000 incremental vouchers, a critical next step toward 

reducing worst case needs. 

Other elements of the Administration’s FY 2001 budget will play an important part in addressing 

the needs highlighted in this report. They include CDBG, HOME and the Low-Income Housing Tax 

Credit – all programs that successfully produce housing that is affordable for very low-income 

households. Combining these programs with a continued expansion of tenant-based rental assistance is 

an essential component of the Administration’s strategy to reduce worst case needs. 

But we can -- and should -- do more. A recent analysis of the FHA Insurance Fund for FY 1999 

places the value of the Fund at more than $5 billion above previous projections. On March 7, President 

Clinton directed HUD, along with other members of the Administration, to develop recommendations on 

how best to use these funds to strengthen federal housing programs and enhance comprehensive 

affordable housing opportunities. Over the next few months, I will work to ensure that our 

recommendations reflect the worst case needs identified in this report. 

I look forward to working with the Congress to reverse the trends documented in this report. 

America is currently experiencing a period of unprecedented prosperity. But too many Americans are 

not yet sharing in this success. We need a bold federal commitment to affordable housing if we are to 

fulfill our nation’s responsibility to its neediest citizens. 

Sincerely, 

Andrew Cuomo 
Table of Contents 

Executive Summary................................................................................................................ vii

Chapter 1: Introduction............................................................................................................. 1

Terms and Sources ................................................................................................................ 1

Building the Report ............................................................................................................... 3

The Policy Context of This Report...................................................................................... 11

Chapter 2: Findings................................................................................................................. 13

Major Findings .................................................................................................................... 13

Finding 1: Despite a long and robust economic expansion, worst case housing needs

reached an all-time high of 5.4 million families in 1997................................................. 13

Finding 2: Families with worst case needs are working harder than ever. ...................... 18

Finding 3: The affordable housing stock, as measured by the number of total rental units

that are affordable for families with incomes at 30 percent of area median income,

continues to shrink. .......................................................................................................... 22

Finding 4: Between 1991 and 1997, worst case housing needs became more concentrated

among households with incomes below 30 percent of the area median income. ............ 26

Finding 5: Worst case housing needs became more concentrated among minority

households during the 1990s............................................................................................ 34

Finding 6: Poor families living in the suburbs most often face worst case needs. .......... 36

Supplementary Findings ...................................................................................................... 40

Finding 7: Worst case housing needs continue to be a persistent problem for all

demographic groups......................................................................................................... 40

Finding 8: Very-low-income renters in the West continue to be most likely to have worst

case problems and least likely to receive any type of housing assistance. ...................... 42

Finding 9: When both very-low-income renters with some form of housing assistance

and those without assistance are considered, the number of very-low-income renters with

severe rent burdens rose by 500,000 families between 1995 and 1997........................... 46

Chapter 3: Policy Implications................................................................................................ 49

iii 
Appendix A: Data on Housing Problems and Supplies of Affordable Housing................... A-1

Appendix B: Glossary......................................................................................................... A-19

Appendix C: Changes in the 1997 American Housing Survey and Their Impacts on

Estimates of Worst Case Needs .................................................................... A-23

Appendix D: Procedures Used to Estimate Housing Needs and Rental Affordability From

American Housing Survey Data.................................................................... A-27

iv 
Exhibits

Exhibit 1 Changes in the 1997 American Housing Survey Affecting Estimates of Worst

Case Needs............................................................................ 3

Exhibit 2 Income Categories Used in Housing Programs.................................. 5

Exhibit 3 Extremely Low, Very Low, and Low Income: Examples for Nine

Metropolitan Areas of HUD’s 1999 Section 8 Income Limits for

Four-Person Households............................................................ 6

Exhibit 4 Housing Assistance and Affordable Housing Programs........................ 7

Exhibit 5 Income Targeting for Federal Housing Assistance: Recent Changes......... 9

Exhibit 6 Household-Level Data From HUD Programs................................... 10

Exhibit 7 Severe Rent Burdens Are by Far the Most Common Problem Among

Families with Worst Case Needs.................................................. 14

Exhibit 8 Between 1991 and 1997, Worst Case Needs Rose from 4.8 Million to a

Record High of 5.4 Million Households......................................... 16

Exhibit 9 The Number With Worst Case Needs Rose Because More Families Paid

More than Half of Their Income for Rent........................................ 17

Exhibit 10 Between 1991 and 1997, Growth in Worst Case Needs Was Highest Among

Working Families with Children................................................... 19

Exhibit 11 Increasing Numbers of Extremely-Low-Income Families with Children Are

Working.............................................................................. 20

Exhibit 12 More Than 2 Million Unassisted Working Renters with Worst Case Needs

Have Extremely Low Incomes..................................................... 21

Exhibit 13 The Supply of Rental Units Affordable to Extremely-Low-Income Families

Continues to Shrink................................................................. 23

Exhibit 14 The Mismatch Between Extremely-Low-Income Renters and Units Both

Affordable and Available to Them Is Worse and Widening Even Faster.... 24

Exhibit 15 Rental Units Affordable to Very-Low-Income Families Grew Again to Offset

Some of Earlier Loss................................................................ 26

Exhibit 16 Priority Problems Became More Concentrated Among Extremely-LowIncome Renters During the 1990s..................................................28

v 
Exhibit 17 Renters with Income Below 30 Percent of Median, Especially Those with

Income Below 20 Percent of Median, Are the Only Income Groups Likely to

Have Severe Housing Problems................................................... 29

Exhibit 18 Rental Housing Assistance Programs Are Well Targeted to the ExtremelyLow-Income Groups Most Likely to Have Priority Problems................. 31

Exhibit 19 Many Assisted Families Have Earnings as Their Primary Source

of Income............................................................................. 33

Exhibit 20 Growth in Worst Case Needs During the 1990s was Highest Among

Hispanics and Blacks............................................................... 34

Exhibit 21 Very-Low-Income Renters Are Most Likely to Have Worst Case Problems in

the Suburbs and Least Likely to Receive Assistance There................... 37

Exhibit 22 Losses in Units Affordable to Extremely-Low-Income Renters Were Greatest

in the Suburbs, Both Absolutely and Relatively................................ 39

Exhibit 23 Growth in Worst Case Needs Was Below Average for Household Types

More Likely to Be Assisted........................................................ 41

Exhibit 24 During the 1990s, Worst Case Needs Were Most Likely in the West, But

They Grew Most Quickly in the Northeast...................................... 43

Exhibit 25 Mismatches Between Extremely-Low-Income Renters and Available

Rental Units They Can Afford Are Greatest in the West, But

Worsening Everywhere............................................................. 44

Exhibit 26 For Families Who Need to Move, Using Tenant-Based Assistance Became

Easier in Each Region Between 1991 and 1997................................ 45

Exhibit 27 Between 1995 and 1997, There Was an Alarming Rise in the Number of

Very-Low-Income Renters Paying More Than Half of Their Income for

Rent................................................................................... 47

Exhibit 28 New Units of Federal Rental Assistance Have Been Minimal in

Recent Years......................................................................... 50

vi 
Executive Summary 

This report documents the continuing, growing crisis in housing affordability throughout the 

Nation. It contains important new information that is critical to ensuring an informed 

discussion regarding the appropriate Federal responses to this crisis. Specifically, as of 1997: 

•	 The housing affordability crisis facing very-low-income renters continues to worsen as 

5.4 million renter households, a record high, are experiencing worst case needs for 

housing assistance. 

•	 The number of working families with worst case housing needs has increased sharply 

since 1991. 

•	 The stock of rental units that are affordable to extremely-low-income renters has 

continued to shrink, with even sharper decreases in units that are both affordable and 

available to these renters. 

•	 Worst case needs have become more concentrated among families with extremely low 

incomes. 

•	 Worst case needs have increased most quickly in minority households, particularly 

among working families with children. 

•	 Very-low-income families remain most likely to face worst case problems when they live 

in the suburbs. 

For fiscal years 1999 and 2000, Congress provided for modest expansion in the number of 

families assisted by Section 8 vouchers after 4 years with no new assistance. The worsening 

affordability crisis facing very-low-income families of all demographic backgrounds— 

including working families with children, minority households, and the elderly—argues 

strongly for greater expansion in Federal rental housing assistance combined with wise use of 

Federal supply-side subsidies to boost the production of housing affordable to these families. 

Major Findings 

Finding 1: Despite continued robust economic expansion, in 1997 worst case 

housing needs reached an all-time high of 5.4 million families, 

containing some 12.3 million individuals. 

•	 At least 5.4 million unassisted very-low-income renter households—a record level—pay 

over half their income for housing or live in severely inadequate housing. Moreover, 

these estimates exclude the homeless, for whom accurate data are unavailable. For 

Federal rental assistance programs, “very-low-income” renters are those with incomes 

below 50 percent of area median income. 

vii 
•	 Between 1995 and 1997, the number of households with these “worst case” housing 

problems increased by 4 percent, twice the rate of growth in the number of all U.S. 

households. 

•	 Since the economic recovery began in 1991, the number of families with these worst case 

needs for rental assistance rose by almost 600,000, an increase of 12 percent, compared 

to a growth rate of 7 percent for all households. 

Finding 2: Families with worst case housing needs are working harder than 

ever. Between 1991 and 1997, despite a robust economic 

recovery, worst case needs increased more than three times as 

quickly for households with full-time earners than for all other verylow-income renters. 

•	 Between 1991 and 1997, the number of worst case households with earnings equivalent 

to full-time work at the minimum wage increased by 28 percent. This growth is more 

than three times the growth rate in worst case needs for all other very-low-income 

households, which over the same period rose by 8 percent. 

•	 One in three families with children who have worst case needs have earnings 

representing full-time work at or above the minimum wage. Growth in worst case needs 

was fastest among working families with children. Between 1995 and 1997 alone the 

number of worst case working families with children increased by 17 percent, while 

between 1991 and 1997 the number with needs grew by 29 percent. 

•	 Working households with worst case needs were increasingly likely to have “extremely 

low incomes,” that is, incomes below 30 percent of area median income. Over 2 million 

extremely-low-income households with earnings as their main source of income had 

worst case needs, an increase of 400,000—or one-fourth—between 1995 and 1997. 

Finding 3: The housing stock affordable to the lowest-income Americans 

continues to shrink. 

•	 The housing stock most needed by renters with worst case needs—that is, rental units that are 

affordable for extremely-low-income households without rental assistance—continues to 

shrink. The number of rental units affordable to families with incomes below 30 percent of 

area median income dropped by 5 percent between 1991 and 1997, a decline of over 370,000 

units. 

•	 The gap between extremely-low-income families and units they can afford is large and 

growing. In 1997, for every 100 households with incomes at or below 30 percent of 

median income, there were only 36 units both affordable to them and available for rent 

by them, well below the 47 such units for every 100 extremely-low-income families 

observed in 1991, only 6 years earlier. 

viii 
Finding 4: The poorest families are increasingly the hardest hit by worst case 

needs. Between 1991 and 1997, worst case needs became more 

concentrated among households with incomes below 30 percent of 

the area median income. By 1997, over three-fourths of those with 

worst case needs had these extremely low incomes. 

•	 Almost 4.2 million of those with worst case needs, over 77 percent of the total with worst 

case needs, have extremely low incomes. Two-thirds of unassisted extremely-lowincome renters have worst case needs for rental assistance. 

•	 The likelihood of having worst case needs declines sharply among renters with higher 

incomes. Only 21 percent of unassisted renters with incomes between 31 and 50 percent 

of area median income have worst case needs. Fewer than 6 percent of renters with 

incomes between 51 and 80 percent of area median income experience these severe 

problems. 

•	 Federal rental assistance programs are still well targeted to the extremely-low-income 

groups most likely otherwise to have worst case needs. Seven of 10 assisted households 

have incomes below 30 percent of area median income. 

Finding 5: Worst case housing needs among minority households increased 

dramatically during the 1990s, whereas needs among non-Hispanic 

whites were stable. Increases were particularly high among 

Hispanic households and working minority families with children. 

•	 Between 1991 and 1997, the number of Hispanic households with worst case needs 

increased by 45 percent to 1 million, while worst case needs among Hispanic working 

families with children rose by 74 percent. By comparison, the total number of Hispanic 

households rose during this period by 36 percent. 

•	 Between 1991 and 1997, the number of African-American households with worst case 

needs rose by 13 percent to 1.1 million, while worst case needs among African-American 

working families with children rose by 31 percent. Both growth rates exceeded the 

growth in all African-American households, which rose in number by 11 percent. 

•	 Over this 6-year period, worst case needs were essentially stable at 2.9 million among 

non-Hispanic white households. Needs grew at only 2 percent, mirroring the rate of 

growth in all white households. 

Finding 6: Poor families living in the suburbs most frequently face worst case 

needs. Both very-low-income renters and extremely-low-income 

renters remain more likely to have worst case problems in the 

suburbs than elsewhere. Shrinkage in the number of units 

ix 
affordable to extremely-low-income families was greatest in the 

suburbs during the 1990s. 

•	 Very-low-income renters in the suburbs have a greater likelihood of having worst case 

needs than very-low-income renters who live in cities or outside metropolitan areas. 

Whereas nationally 37 percent of very-low-income renters have worst case problems, 

over 40 percent of very-low-income renters living in the suburbs have worst case needs, 

as do fully 69 percent of extremely-low-income renters. Over one-third of worst case 

households—more than 1.8 million households—live in the suburbs. 

•	 Reflecting housing market pressures from continued population and job growth, losses in 

units affordable to extremely-low-income renters were greatest in the suburbs during the 

1990s, both absolutely and relatively. Between 1991 and 1997, the number of units 

affordable to extremely-low-income renters fell by 200,000 in the suburbs, a loss of 10 

percent of the stock. 

Supplementary Findings 

Finding 7: Worst case housing needs continue to be a persistent problem for 

all demographic groups. Of the 12.3 million persons with worst 

case needs, over 1.5 million are elderly and 4.3 million are children. 

The number of adults with disabilities in households with worst 

case needs remains in the range of 1.1 to 1.4 million. 

•	 Growth in worst case needs was lowest between 1991 and 1997 among the household 

types most likely to be admitted to rental assistance programs, the elderly and families 

with children. While overall worst case needs grew by 12 percent during this period, the 

number of elderly households with worst case needs increased by 8 percent. The number 

of worst case needs families with children increased by 6 percent. 

•	 Despite their slower growth in number of households with needs, both very-low-income 

elderly households and very-low-income families with children became more likely to 

experience worst case needs. While the total number of very-low-income elderly renters 

fell slightly, the remaining elderly households in this income group became more likely 

to have a worst case housing need—36 percent in 1997, compared with 31 percent in 

1995. Very-low-income families with children became more likely to have worst case 

needs as well. Among these families, this likelihood rose to 33 percent in 1997 from 31 

percent in 1991. 

Finding 8: Very-low-income renters in the West continue to be most likely to 

have worst case problems. During the 1990s, however, the number 

of very-low-income renters with worst case needs increased most 

rapidly in the Northeast. 

x 
•	 Two-fifths (40 percent) of very-low-income renters in the West, 1.5 million households, 

had worst case problems in 1997. Worst case problems were also common in the 

Northeast, where they occurred among 1.3 million households. Between 1991 and 1997, 

the share of Northeastern very-low-income renters who had worst case needs rose from 

34 to 39 percent. 

•	 In the West, supplies of units affordable to renters with extremely low incomes fell to a 

new low: there were only 56 affordable units for every 100 extremely-low-income renter 

households needing them. Shortages were almost as severe in the Northeast, where there 

were 68 affordable units for every 100 extremely-low-income renter households needing 

them. There were even fewer units both affordable to extremely-low-income renters and 

available to them: only 27 for every 100 extremely-low-income renter households in the 

West and 37 per 100 households in the Northeast. 

•	 Very-low-income renters were least likely to receive some form of housing assistance in 

the South (where 21 percent reported some form of assistance) and in the West (with 23 

percent assisted). In the Northeast and Midwest regions, over 30 percent of very-lowincome renters reported assistance. 

Finding 9: When both very-low-income renters with some form of housing 

assistance and those without assistance are considered, the 

number of very-low-income renter households with severe rent 

burdens rose by 500,000 families between 1995 and 1997. 

•	 In 1997, 6.4 million very-low-income renters had a severe rent burden, a sharp increase 

from 5.9 million in 1995. This measured increase of 8 percent is not affected by the 1997 

improvements in American Housing Survey (AHS) housing assistance questions that 

complicate assessments of trends in the estimates of worst case needs discussed above. 

Therefore, it implies strongly that worst case needs actually rose by more than 4 percent 

between 1995 and 1997. 

•	 The 6.4 million very-low-income renters with a severe rent burden in 1997 include 1.3 

million households who report that they receive some form of housing assistance. 

Because the 1997 change in AHS housing assistance questions was made in order to 

identify assisted households more accurately, this evidence of severe rent burdens among 

households reporting assistance is disturbing and will be monitored closely. 

xi 
Policy Implications 

The implications of this report’s findings on rising worst case housing needs and diminishing 

supplies of affordable housing are: 

•	 The Federal Government must continue to expand rental assistance. Failing to provide 

sufficient annual increases in rental housing assistance will exacerbate worst case needs 

and leave extremely-low-income American families stranded in an increasingly 

constricted housing market. Rental assistance is a critical and flexible tool that provides 

access to decent and affordable housing for low-income families of all backgrounds 

including the elderly, working families with children, and minority households. The 

President’s Budget for Fiscal Year 2001, which includes funding for 120,000 incremental 

Section 8 vouchers, is an essential step forward to overcome this affordable housing 

crisis and reduce the number of families suffering worst case housing problems. 

•	 Federal rental assistance is critical for working families with worst case needs, whose 

incomes are increasingly consumed by rent, leaving them less able to spend on food, 

medical care, education, or other necessities. By providing 32,000 Section 8 vouchers for 

use with local welfare-to-work efforts, the President’s FY2001 Budget will help families 

find permanent employment and locate decent, affordable housing. 

•	 Federal programs that supply affordable housing—such as the HOME Investment 

Partnership program, Community Development Block Grants (CDBG), and the LowIncome Housing Tax Credit (LIHTC)—must be complemented by continued expansion 

of tenant-based rental assistance to relieve worst case housing needs. Without tenantbased subsidies, the extremely-low-income households most likely to have worst case 

needs can rarely afford the housing created by these programs. The President’s FY2001 

Budget recognizes this reality by providing 10,000 incremental Section 8 vouchers 

specifically targeted for use in conjunction with the LIHTC and FHA Multifamily 

Insurance. 

•	 Additional Federal programs that help provide permanent affordable housing for 

vulnerable populations, including the Housing for People with AIDS (HOPWA) and 

Shelter Plus Care programs, should also be expanded to better meet the continuum of 

housing needs for extremely-low-income Americans. The Section 202 Supportive 

Housing for the Elderly and the Section 811 Supportive Housing for Persons With 

Disabilities Programs are important vehicles for providing affordable housing and 

supportive services for these needy populations. 

•	 Additional resources to expand the supply of affordable housing may be available from 

surplus funds generated by the Federal Housing Administration and its Mutual Mortgage 

Insurance (MMI) Fund. HUD and OMB are currently preparing recommendations to the 

President for how best to use these newly available funds to further strengthen Federal 

housing programs and enhance comprehensive affordable housing opportunities. 

xii 
Organization of the Report 

The body of this report has three parts. The introduction (Chapter 1) explains the background 

and approach of this report, specifically discussing the procedural and questionnaire changes 

affecting the 1997 American Housing Survey data on which the report is based and their 

impact on estimates of worst case needs. Chapter 2 summarizes statistical data from HUD 

analyses of worst case needs, documenting the major findings. Chapter 3 explores the 

implications of the findings for important policy decisions at the Federal, State, and local 

levels. 

xiii 
xiv
Chapter 1 

Introduction 

Since the early 1990s, the U.S. Department of Housing and Urban Development (HUD) has 

submitted formal reports to Congress on worst case needs for rental housing assistance as 

new data have become available.1

 These reports have drawn on data collected by the Census 

Bureau, U.S. Department of Commerce, in the American Housing Survey (AHS) and in the 

decennial censuses. Since 1996, these reports have also included information from HUD 

administrative data about how well current housing assistance programs are serving families 

and individuals that otherwise would have worst case needs. Because respondents to surveys 

do not always accurately identify whether they receive assistance or the type of program 

through which they are assisted, program administrative data can provide more accurate 

information on the characteristics of assisted renters than are available from the AHS. 

Terms and Sources 

This report is based on data from the 1997 American Housing Survey, which incorporated 

several procedural changes to improve the accuracy and reliability of the data. Although the 

basic content of the questionnaire and the sample of housing units survey both remain 

essentially the same as in earlier years, methods of interviewing respondents and processing 

data were changed. Moreover, as detailed below, the AHS questions asked to identify 

households participating in rental assistance programs were extensively changed in order to 

improve the quality of AHS data on assisted households, thus making the definition of worst 

case needs in 1997 not directly comparable with the definition and estimates from earlier 

years given in previous reports to Congress.2 

In assessing changes over time, it is important to use a consistent definition of worst case 

needs. The definition of “worst case needs” used in past reports was based on (1) the income 

limits included in Federal housing statutes for “very-low-income families” and housing 

conditions defined as (2) “priority housing problems” (see Appendix B, Glossary). Because 

the worst case needs classification represented those receiving preference for admission to 

Federal rental assistance programs, families already assisted by Federal programs were 

excluded from the count. 

1

 In 1990, the Senate Appropriations Committee directed HUD to “resume the annual compilation of a

worst case housing needs survey of the United States.” HUD had reported worst case housing needs to

Congress during the 1980s on an informal basis, following a request from the Chair of the HUD

Subcommittee of the Senate Appropriations Committee. 2

 HUD’s previous reports to Congress are: Priority Problems and “Worst Case” Needs in 1989 (June 1991,

HUD–1314–PDR), The Location of Worst Case Needs in the Late 1980s (December 1992, HUD–1387–

PDR), Worst Case Needs for Housing Assistance in the United States in 1990 and 1991 (June 1994, HUD–

1481–PDR), Rental Housing Assistance at a Crossroads: A Report to Congress on Worst Case Housing

Needs (March 1996), and Rental Housing Assistance—The Crisis Continues (April 1998). The 1994, 1996,

and 1998 reports are available online at http://www.huduser.org under the Publications heading.

1
As detailed in Exhibit 1, however, the revised 1997 AHS questions on participation in 

assistance programs do not distinguish State or local rental assistance programs from Federal 

programs. Therefore, in this report, families who have “worst case needs” are defined as 

those who: 

• Are renters; 

• Do not receive housing assistance from Federal, State, or local government programs; 

•	 Have incomes below 50 percent of their local area median family income, as determined 

by HUD; and 

•	 Pay more than one-half of their income for rent and utilities or live in severely 

substandard housing.

3 

In the years between decennial housing censuses, the basic source of information for 

analyzing the U.S. housing stock and the housing needs of U.S. households is the AHS. The 

AHS is conducted for HUD by the Census Bureau, which completes some 45,000 interviews 

with householders in a national sample of housing units every 2 years. Smaller samples in 47 

large metropolitan statistical areas (MSAs) are surveyed on a 4- to 6-year cycle. 

HUD’s first formal report to Congress on worst case needs, submitted in 1991, was based on 

the national AHS taken in 1989. The second report, in 1992, augmented 1989 AHS data for 

the Nation with information on worst case needs from the metropolitan surveys. In 1994, 

HUD based its report on data from the 1991 national AHS and the 1990 Decennial Census. 

The 1996 report was based on data from the 1993 AHS and, for the first time, included 

administrative data on the characteristics of households participating in the public housing 

and Section 8 programs. The 1996 report also included analyses of data from the Social 

Security Administration (SSA) to better understand the housing needs of persons with 

disabilities and their participation in HUD programs. Finally, that report reanalyzed and 

refined earlier AHS data to more reliably track growth in the number of households with 

worst case housing needs between 1978 and 1993 and to examine changes in the supplies of 

housing affordable to extremely-low-income and very-low-income renters. 

The 1998 report used data from the 1995 AHS and HUD administrative data as of January 

1997 to examine worst case needs and changes in supplies of affordable housing. 

3 Although the homeless have “substandard” housing by definition and thus worst case needs, they are 

excluded from AHS estimates of worst case needs because the AHS surveys and counts only persons in 

housing units. Because of this, AHS estimates undercount the “true” number of households meeting the 

“worst case” definition. Conversely, the AHS may overestimate the number of housed households that have 

worst case problems because income is underreported by some 15 percent by AHS respondents. This 

income underreporting may inflate AHS counts of households with incomes below 50 percent of area 

median that pay more than half of their income for rent. As Chapter 2 discusses, we can estimate the effect 

of income underreporting on worst case estimates, but not the effect of omitting the homeless. 

2
Building the Report 

This report uses data from the 1997 AHS and 1999 HUD administrative data. As Exhibit 1 

details, improvements in the 1997 AHS questions used to identify assisted households 

necessitate changing the definition of worst case needs used in this report from that always 

used previously. In earlier reports, the definition of worst case needs did not categorize 

households reporting State or local rental assistance as already receiving (Federal) assistance 

and therefore, by definition, not part of the unassisted population that would be counted as 

having worst case needs if they had severe housing problems. Because the 1997 AHS 

questions no longer distinguish whether housing assistance is provided by State or local 

government rather than a Federal program, in this report all households reporting assistance 

are excluded from the count of those with worst case needs. 

To evaluate changes between earlier years and 1997 as well as is possible with the new worst 

case needs definition, revised—and lower—estimates of worst case needs derived from 

newly including families reporting State and local assistance as assisted families are reported 

for the years 1991, 1993, and 1995 in this report. Although these revised estimates are the 

best available from earlier surveys, as Exhibit 1 and Appendix C discuss, a variety of 

considerations imply that 1997 data are not directly comparable to data for earlier years, 

particularly for concepts, like worst case needs, that rely heavily on definitions of rental 

assistance. 

Exhibit 1

Changes in the 1997 American Housing Survey Affecting Estimates of

Worst Case Needs

The 1997 National American Housing Survey (AHS) surveyed the same sample of 

households as in 1995 and asked them basically the same questions. But the procedures used 

in gathering and processing the data differed from those in previous surveys in several ways 

that affect all data gathered by the survey. Although these changes should improve data 

quality and timeliness, they necessarily also reduce the comparability of 1997 data to earlier 

results even when exactly the same questions were asked: 

•	 For the first time, the survey was conducted using Computer Assisted Personal 

Interviewing (CAPI). This change should increase accuracy by identifying and 

immediately correcting inconsistent responses at the time of interview. However, 

responses to questions are likely to be affected in unknown ways by the questionnaire 

reorganization and changes in interview timing; 

•	 The Census Bureau changed both the computers and the processing software/language 

used. Thus, all the software for processing the data, editing the data, allocating missing 

values, recoding and transforming variables, preparing tables, and estimating variances 

had to be rewritten. 

Estimates of worst case needs were also directly affected by changes in the questions used to 

identify households receiving rental assistance. In AHS data before 1997, households were 

3
counted as receiving Federal housing assistance if they answered “yes” to one of the 

following questions: “Is the building owned by a public housing authority? Does the Federal 

Government pay some of the cost of the unit? Do the people living here have to report the 

household’s income to someone every year so they can set the rent?” Although the 

households identified as assisted by these questions resembled those counted by program 

data, detailed examination revealed that households often did not report their assistance 

status correctly. (See Duane T. McGough, Characteristics of HUD-Assisted Renters and 

Their Units in 1993, May 1997, and Mark Shroder and Marge Margin, “New Results from 

Administrative Data,” May 1996.) In particular, almost half of households responding that “a 

State or local government pay[s] some of the cost of the unit” were found to participate in 

Federal assistance programs, suggesting that the past practice in worst case reports of 

counting such households as unassisted was misleading. 

Based on research using focus groups of assisted households, a different battery of questions 

was determined to better identify receipt of housing assistance. Accordingly, the order and 

content of the AHS questions about housing assistance were changed. The questions now 

used to identify assisted households are: As part of your rental agreement, do you need to 

answer questions about your income whenever your lease is up for renewal? (If so,) to whom 

do you report your income? Do you pay a lower rent because the government is paying part 

of the cost of the unit? Is the building owned by a public housing authority? 

This new battery of questions identifies 5.6 million households as participating in rental 

assistance programs, 400,000 more than the total of units with Federal, State, or local 

assistance reported in 1995. This total is consistent with the sum of all households actually 

assisted by Federal rental assistance programs run by HUD and the Department of 

Agriculture, of low-income renters occupying units assisted by the Department of the 

Treasury’s low-income housing tax credit (LIHTC), and of renters aided by State and local 

programs. It is highly unlikely, however, that the number is exactly comparable to the 1995 

estimate of 5.2 million, or that the total number assisted actually grew by 400,000 over the 

1995–97 period. 

Because worst case needs include households with severe physical problems, the 1997 

estimates are also affected by changes in questions and processing regarding plumbing and 

other physical problems. Many questions were changed in wording to allow respondents to 

concentrate sequentially on whether a problem meeting the more precise definition occurred 

in their home and whether it occurred within the time period specified (such as the previous 

3 months). Thus, although the improved questionnaire counts 1.8 million households with 

severe physical problems in 1997 compared to 2 million households in 1995, it is unlikely 

that the total number of units with severe physical problems really fell by 200,000 between 

1995 and 1997. 

Although the definition of worst case needs is necessarily changed, the practice of earlier 

reports is continued in the following ways: 

• Detailed income categories are used to examine the housing needs of households. 

4
Like the previous two reports, this report distinguishes among extremely-low-income 

households (those with incomes at or below 30 percent of area median family income, as 

adjusted by HUD), other very-low-income households (those with incomes between 31 and 

50 percent of area median income), and other low-income households (those with incomes 

between 51 and 80 percent of area median income). As detailed in Appendix B, HUD’s 

official income limits are adjusted for household size and for areas with extremely high or 

low housing costs relative to area income. 

Exhibit 2 

Income Categories Used in Housing Programs 

For many HUD programs and housing programs administered by other Federal agencies, 

eligibility is restricted to households whose incomes do not exceed a specific percentage of 

the median family income for the area in which the household lives. HUD estimates median 

family income for each metropolitan area and nonmetropolitan county each year, and the 

official income limits based on HUD-adjusted area median family income (HAMFI) vary by 

location and household size. 

In contrast, poverty status is determined by comparing income with national poverty 

thresholds that vary by household size but not location. Because HUD’s income limits vary 

with location and use smaller adjustments per person for household size, they are not directly 

comparable to Federal poverty lines. Averaged across the United States, however, 30 percent 

of area median income approximates poverty thresholds. 

The number of households below a specified percentage of HUD’s area median income is 

not related to any specific break on the total income distribution, such as quintiles. For 

example, almost one-half (43 percent) of all U.S. households and 62 percent of all renters 

have incomes below 80 percent of their area median income. More than 27 percent of all 

U.S. households have incomes below 50 percent of area median income. 

The upper limits of income categories used in housing programs and in this report are as 

follows: 

80 percent of area median income. Defined as lower income by the U.S. Housing Act and 

used for many rental and homeownership programs. 

60 percent of area median income. Used as low income for the low-income housing tax 

credit and HOME programs. 

50 percent of area median income. Defined as very low income by the U.S. Housing Act 

and used for many rental programs. 

30 percent of area median income. Defined as extremely low income in the Quality 

Housing and Work Responsibility Act of 1998 (QHWRA), which for each rental housing 

assistance program requires that at least a minimum share of entrants have extremely low 

incomes. 

The table below shows how many U.S. renter households fell into the different income 

groups relevant for housing programs in 1997. To suggest the overlap between the HUD 

income groups and poverty, it also shows the share of each income group whose cash income 

fell below the poverty line or below 150 percent of the poverty line, the approximate 

eligibility cutoff for the U.S. Department of Agriculture Food Stamp program. As in this 

5
exhibit, this report frequently refers to specific income groups as ranges of percentages of 

area median income because official terms are so complex. For example, incomes 51–80 

percent of area median are officially “low but not very low” incomes. Exhibit 3 gives 

examples of HUD income cutoffs for nine large metropolitan areas, and Exhibit 4 describes 

HUD’s rental assistance and affordable housing programs. 

Percent Share of U.S. Households 

Income as % of HUD-Adjusted Share of in Group With Income: 

Area Median Family U.S. Renters Below the Below 150% of 

Income (HAMFI) 1997 (%) Poverty Level the Poverty Level 

0–30 27 88 99 

31–50 17 14 66 

51–60 7 1 21 

61–80 12 0 6 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

Exhibit 3

Extremely Low, Very Low, and Low Income: Examples for Nine

Metropolitan Areas of HUD’s 1999 Section 8 Income Limits for Four-Person

Households*

Extremely Very Low Area 

Low Income Income Low Income Median 

(30 percent (50 percent (80 percent Family 

of median) of median) of median)** Income 

Los Angeles $15,400 $25,650 $41,050 $51,300 

New York $16,000 $26,700 $42,700 $53,400 

Chicago $19,150 $31,900 $47,800 $63,800 

Philadelphia $16,700 $27,800 $44,500 $55,600 

Detroit $18,150 $30,250 $47,800 $60,500 

Washington, D.C. $23,600 $39,350 $47,800 $78,900 

Boston $18,800 $31,350 $47,800 $62,700 

Houston $16,250 $27,050 $43,300 $54,100 

Atlanta $17,950 $29,950 $47,800 $59,900 

*Adjustments for household size are as follows: 1 person, 70 percent of the 4-person limit; 2 persons, 80

percent; 3 persons, 90 percent; 5 persons, 108 percent; 6 persons, 116 percent; and an additional 8

percent for each additional person.

**The “80 percent of median” limits for each area cannot exceed the national median of $47,800, unless

justified by unusually high housing costs in the local area.

Source: HUD Section 8 income limits, fiscal year 1999

6
Exhibit 4

Housing Assistance and Affordable Housing Programs

Federal rental assistance programs operate in three basic ways: 

1. Public housing. These units are owned by local public agencies. From 1937 to the mid1980s, public housing was used extensively to produce additional assisted housing units. 

Today, there are 1.1 million occupied units of public housing. 

2. Project-based assisted housing. These programs supported the construction and 

rehabilitation of 1.4 million rental units now occupied by low-income households. Deep rent 

subsidies are attached to projects owned by for-profit and nonprofit sponsors that must rent 

units to eligible households. These programs added large numbers of assisted units from 

1974 to the early 1980s. Since then, HUD has continued to build deeply subsidized units for 

the elderly and disabled under Sections 202 and 811. 

3. Tenant-based assisted housing. These programs provide direct rental assistance to 1.6 

million renter households to enable them to find their own housing on the open market. The 

maximum subsidy is the difference between the tenant contribution and the local fair market 

rent (FMR), an average rent for standard quality housing in the area. Begun in 1974, this type 

of assistance has accounted for most of the incremental units, or additions to assisted 

housing, since the mid-1980s. Another 110,000 vouchers were appropriated in fiscal years 

1999 and 2000. 

In all three programs, assisted households pay rents that are a percentage of their adjusted 

income—usually 30 percent. These “deep” subsidies allow even the poorest households to 

live in assisted housing. 

Other Federal programs produce affordable housing. There are a number of other 

Federal housing programs in which renters are charged fixed or flat rents, with the maximum 

determined by program rules. Households pay the established rent rather than a percentage of 

their income. Without an additional subsidy, the poorest households often cannot afford this 

housing. These programs include: 

•	 The Low-Income Housing Tax Credit (LIHTC) program. This tax credit program 

subsidizes the capital costs of units that must bear rents affordable to households with 

incomes at or below 60 percent of area median income. Through 1999, HUD estimates 

that this program has produced more than 700,000 units since its enactment in 1986. Of 

these units, about 675,000 are “affordable” (that is, the units have rents at or below 30 

percent of 60 percent of area median income).4 

•	 The HOME Investment Partnership (HOME) program. This is a formula grant to 

States and local governments that can be used to assist existing homeowners, first-time 

4

 The estimate is based on 1994 counts of 407,964 total units and 383,031 low-income units growing at an 

assumed rate of 60,000 units per annum and 58,400 units per annum, respectively. 

7 
 homebuyers, or renters. Between 1992 and August 1999, HOME produced 203,000 

affordable rental units. Qualifying rents must be affordable to households with incomes 

at or below 65 percent of area median income, or below local FMRs if the local FMRs 

are lower than rents affordable at 65 percent of area median income. 

•	 Older rental subsidy programs. The Section 221(d)(3) below market interest rate 

(BMIR) program and the Section 236 program were active from the early 1960s through 

the early 1970s. They were designed to produce housing affordable by families with 

incomes above the public housing income limits. Over time many projects or portions of 

projects in these programs became “project-based assisted housing” rather than “rental 

subsidy” as deep rental subsidies were attached to the units. There remain 300,000 units 

subsidized by these older programs that do not have deep rental subsidies. 

The extremely-low-income category, which has also been highlighted in the previous two 

reports, is particularly important for analyzing the policy implications of the data and 

findings contained in this report. On October 21, 1998, President Clinton signed into law the 

Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276). That law provided 

that at least 40 percent of all public housing and project-based Section 8 units that become 

available for rent in any given year and at least 75 percent of all vouchers that become 

available in any given year (either through new appropriations or through “turnover” of 

existing vouchers) must be provided to families with income at or below 30 percent of area 

median income. This important legislative achievement recognized the particular 

effectiveness of Section 8 rental vouchers in meeting the housing affordability needs of 

extremely-low-income families without concentrating poor families in particular projects and 

neighborhoods. It also recognized the need to ensure that in the absence of the Federal 

preferences that were repealed by QHWRA, a substantial share of the units in public and 

project-based assisted housing programs must be targeted to the extremely-low-income 

families most likely to have worst case needs.

5 

5

 For a history of the Federal preferences, see Exhibit 12, “History of the Federal Preference System,” on 

page 17 of the April 1998 worst case report, Rental Housing Assistance—The Crisis Continues. 

8
Exhibit 5

Income Targeting for Federal Housing Assistance: Recent Changes

Recent Legislation 

On October 21, 1998, President Clinton signed into law the Quality Housing and Work 

Responsibility Act of 1998 (QHWRA). This law implemented significant reforms to the 

Nation’s public housing and tenant-based Section 8 programs. Among these reforms were 

changes in Federal requirements for targeting housing assistance. The Act replaced the 

previous system of Federal preferences with minimum Federal thresholds for targeting and a 

local planning process through which public housing authorities (PHAs) may develop local 

preferences with input from a resident advisory board. Specifically, the Act provided for the 

following: 

Public Housing. PHAs are required to reserve at least 40 percent of all public housing units 

that become available for rent in any given year for families with incomes at or below 30 

percent of the local area median income. Consistent with the Act’s stated purpose of, 

“facilitating mixed-income communities and decreasing concentrations of poverty,” PHAs 

are required to develop admissions policies to provide for deconcentration of poverty and 

income-mixing. In addition, PHAs are prohibited from concentrating very-low-income 

families in certain buildings or public housing developments. 

Tenant-based Section 8 (Vouchers). PHAs and other entities charged with administering 

the Section 8 tenant-based program are required to reserve at least 75 percent of all vouchers 

that become available in any given year, either through new appropriations or through 

“turnover” of existing vouchers, for families with incomes at or below 30 percent of the local 

area median income. 

Project-based Section 8. Owners of buildings that receive assistance under the project-based 

Section 8 program are required to reserve at least 40 percent of all units that receive Section 

8 assistance and that become available for occupancy in any given year for families at or 

below 30 percent of the local area median income. 

This report also provides information on the housing problems of higher income families, 

including those in the income group between 51 and 80 percent of median that are now also 

eligible for rental assistance programs. Although some households with incomes above 50 

percent of median income have the severe “priority” problems that qualified households for 

Federal preference in admission to rental assistance programs before QHWRA, these higherincome households have never been included in the definition of worst case needs. This 

approach was adopted because in the 1980s all tenant-based vouchers had to go to very-lowincome renters, and it has been used in all reports on worst case housing needs. 

9
•	 The most recent information from HUD administrative records is used to show how 

rental assistance programs serve different income and demographic groups. 

The 1998 report used data from the Multifamily Tenant Characteristics System (MTCS) and 

the Tenant Rental Assistance Certification System (TRACS) as of February 1997. This report 

uses TRACS and MTCS data from April and August 1999, respectively. 

Exhibit 6

Household-Level Data From HUD Programs

The Multifamily Tenant Characteristics System (MTCS) is an automated database of 

households assisted by public housing and the tenant-based Section 8 certificate and voucher 

programs and other programs administered by HUD’s Office of Public and Indian Housing. 

The system contains information about the demographic characteristics of each household, 

the level and sources of the household’s income, and the address of the housing unit. The 

information is based on the form used by public housing authorities (PHAs) to calculate each 

household’s rent and subsidy levels. As of August 1999, the system contained over 2.3 

million household records, or about 86 percent of the occupied units. 

The Tenant Rental Assistance Certification System (TRACS) is a similar system for 

households assisted in project-based Section 8 programs and other assisted projects 

administered by HUD’s Office of Housing. Information in TRACS is based on forms 

completed by the private owner or manager of the project and submitted to HUD. As of April 

1999, TRACS contained over 1.6 million household records, or about 83 percent of the 

available units. 

Tables providing additional information from MTCS and TRACS data on the income levels 

of assisted households can be found in Recent Research Results, published by HUD’s Office 

of Policy Development and Research (PD&R) in February 1998, or at 

http://www.huduser.org under “Periodicals—Recent Research Results.” For data from 

MTCS and TRACS summarized for each housing project and each census tract, see A 

Picture of Subsidized Households, published by PD&R for 1996, 1997, and 1998 

(www.huduser.org/datasets/assthsg.html). These reports provide income and demographic 

information at the census tract and project levels, along with national and regional reports, 

based on HUD’s administrative records. 

Another source of information on households receiving Federal housing assistance is 

Characteristics of HUD-Assisted Renters and Their Units in 1993, published by PD&R in 

May 1997. This report is based on case-by-case matching of administrative data on the 

addresses of assisted housing units to AHS sample cases. It provides AHS summary 

tabulations for all assisted households, as well as separately identifying tenants in public 

housing, private-based projects, and those receiving Section 8 certificates or vouchers. 

10
•	 1997 AHS national data are used to update the evidence of mismatches between 

very-low-income renters, or extremely-low-income renters, and the availability of 

units affordable to them. 

Earlier reports tracked numbers of renters with incomes below 30 percent or 50 percent of 

area median compared to numbers of units affordable to these renters, assuming that units are 

“affordable” if only 30 percent of income is spent on rent and utilities. The 1996 and 1998 

reports also documented changes in the number of private-market units affordable to renters 

in these income groups. Because the changes in questions about housing assistance mean that 

1997 counts of unassisted units are not comparable to earlier data, this report focuses on 

changes in the total number of affordable units, including those with Federal, State, or local 

assistance, rather than examining only private-market units. 

The Policy Context of This Report 

The passage of QHWRA resolved many policy issues about program targeting that had been 

under debate for several years. Nevertheless, many basic challenges remain to ensure that 

affordable housing is available for those with the greatest need. The findings of this report 

analyze many of these challenges in detail and provide useful information for policymakers 

at all levels—Federal, State, and local—to consider in establishing affordable housing 

strategies and funding levels that effectively and efficiently meet the housing needs of lowincome Americans. The State and local levels of government now have primary 

responsibility for ensuring appropriate admissions preferences for public housing and Section 

8 assisted housing, as well as effective targeting of resources such as HOME and Community 

Development Block Grant (CDBG) dollars and LIHTC allocations. At the Federal level, 

decisions about adequate appropriations for these key programs will be critical in 

determining how quickly unmet needs can be met. In addition, there is need for continued 

assessment of the effectiveness of targeting of those programs covered by QHWRA and other 

core HUD programs, such as the CDBG and HOME block grants, and of the effectiveness of 

these programs in meeting worst case housing needs. Successful implementation of the 

Government Performance and Results Act of 1993 (GPRA) is an essential component of this 

continuing process of program assessment and improvement. 

11
12
Chapter 2 

Findings 

Major Findings 

Worst case needs for housing assistance, already at all-time highs in 1993 and 1995, 

increased further between 1995 and 1997, despite continued vigorous economic expansion. 

In the fall of 1997, almost 5.4 million very-low-income renter households—containing some 

12.3 million individuals—paid more than one-half of their income for housing or lived in 

severely inadequate housing. Among very-low-income renters, the share with worst case 

needs remained at 37 percent. These households represent 5 percent of the Nation’s 

population and a disturbing one-sixth of all U.S. renters. Without Federal, State, or local 

housing assistance, these renting families face severe financial pressures—many are merely a 

missed paycheck or unexpected medical bill away from homelessness. 

Finding 1: Despite a long and robust economic expansion, worst case housing 

needs reached an all-time high of 5.4 million families in 1997. These 

severe problems among unassisted renters increased by at least 4 

percent between 1995 and 1997. 

•	 In 1997, 5.4 million unassisted very-low-income renter households, a record number, 

paid over half their income for housing or lived in severely inadequate housing. 

According to the 1997 American Housing Survey, almost 5.4 million very-low-income 

renters had “worst case” needs for rental housing assistance and were not already assisted by 

Federal, State, or local rental assistance programs. Because this total excludes households 

participating in State and local programs,

6

 it is not directly comparable to the 5.3 million 

worst case estimate for 1995 highlighted in HUD’s 1997 Report to Congress, Rental Housing 

Assistance—The Crisis Continues. It does, however, represent an increase of more than 

200,000 households over the most comparable estimate available for 1995. 

For as long as worst case needs have been reported, affordability rather than housing quality 

has been the predominant problem facing unassisted renters. In 1997, 94 percent of 

households with worst case problems paid more than one-half their income for rent. The 

proportion of worst case families living in housing with severe physical problems was 9 

percent in 1997. As Exhibit 7 illustrates, only 3 percent of the total had both a severe rent 

burden and severe physical problems. However, another 20 percent had multiple problems, 

having one or more moderate problems in addition to a severe rent burden or severe physical 

problems. Specifically, 14 percent of those with worst case needs for assistance paid more 

than half of their income for rent and also lived in crowded or moderately inadequate 

6

 Some of these households have severe rent burdens or severely inadequate housing, and therefore were 

included in the worst case count for 1995 in HUD’s 1998 worst case report. 

13
housing, while 3 percent lived in severely inadequate housing while also experiencing either 

crowding or a rent consuming 30–49 percent of their income. 

Exhibit 7

Severe Rent Burdens Are by Far the Most Common Problem

Among Families with Worst Case Needs

77.3% 

13.8% 

2.9% 

3.1% 

3.0% 

Severe rent burden only 

Severe burden & moderate problem(s) 

Severe burden & severely inadequate 

Severely inadequate only 

Severely inadequate & moderate 

problems 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

Although almost one-fifth of worst case households had more than one housing problem, as 

Exhibit 7 details, severe rent burden was the only housing problem for 77 percent of families 

with worst case needs. Since these families lived in adequate, uncrowded housing, but paid 

more than half of the their income for rent, their only housing problem could be solved if 

they could obtain a Section 8 voucher that allowed them to afford their current housing. The 

share of worst case households whose only housing problem is a severe rent burden has risen 

substantially over the 20 years for which essentially comparable AHS data exist. Between 

1978 and 1989, using the worst case needs definition of earlier reports, the share of worst 

case households whose only housing problem is a severe rent burden rose from 65 to 71 

percent. Between 1991 and 1997, using the 1997 definition of worst case needs, this share 

rose from 74 to 77 percent. 

Continuing a rise observed between 1993 and 1995, the incidence of overcrowding rose 

slightly between 1995 and 1997 among all renters (from 4.9 to 5.6 percent), but among very14
low-income renters crowding remained stable at 7.9 percent. Overcrowding alone does not 

qualify a household as having worst case needs in this or previous reports to Congress.7 

•	 Between 1995 and 1997, the number of households with worst case needs increased by 

more than 200,000. This represents a 4-percent increase in worst case needs, twice the 

rate of growth in the number of all U.S. households during the same period. 

To determine whether worst case needs changed between 1995 and 1997, the 5.4 million 

figure for 1997 was compared to reestimates of worst case needs in earlier years that 

similarly—but newly—include households reporting “State or local government” assistance 

as assisted. Exhibit 8 presents new estimates for 1991, 1993, and 1995 that are as comparable 

to the 1997 worst case needs estimate as is possible by using previous AHS questions.

8

 Using 

the revised, and lower, definition of worst case needs necessitated by the 1997 AHS 

questions, worst case needs are shown to have increased by 205,000 between 1995 and 1997. 

This represents a 4-percent increase in the number of families with worst case needs, twice 

the rate of increase in the number of all U.S. households during this period. For comparison, 

Exhibit 8 also graphs the estimates of worst case needs used in HUD’s past reports to 

Congress (“past definition”). For our purpose of tracking and assessing change over time, it 

is encouraging that both the new and old approaches show similar trends during the early 

1990s—a sharp increase of some 400,000 households between 1991 and 1993, followed by 

essential stability between 1993 and 1995.9 

7

 Under the Federal preference system in effect between 1988 and 1996, crowding did not automatically

give a household a Federal preference for admission to assisted housing programs. 8

 Although this is the best comparison possible from existing data, it is likely to give an underestimate of

changes in worst case needs between 1995 and 1997. As discussed above in Exhibit 1, it is unlikely that the

number of assisted households actually increased by 400,000 between 1995 and 1997. 9

 As noted in Chapter 1’s discussion of data sources, estimates of worst case needs from the AHS are

necessarily low to the extent that they omit homeless individuals and households, but high to the extent that

income underreporting inflates counts of very-low-income renters who spend more than half of their income

for rent. The only comparisons of income as reported on the AHS to independent estimates from national

product accounts suggest that on average AHS estimates of total money income are some 14 to 15 percent

lower than the independent estimates, with underreporting greatest for income from interest and dividends.

If we could assume that all households equally underreported income by 15 percent (which is unlikely to be

the case), the AHS estimate for worst case needs in 1997 under the 1997 definition would be 4.4 million

rather than 5.4 million, while that for 1991 would have been 3.7 million rather than 4.8 million. These

“what-if” estimates suggest that underreported incomes inflate AHS estimates of worst case needs by

approximately one-fifth, but that they do not reduce the utility of the AHS for consistently tracking changes

in worst case needs over time. Similar estimates of the effect on estimates of worst case needs of failing to

include the homeless can not be quantified.

15
Exhibit 8

Between 1991 and 1997, Worst Case Needs Rose from 4.8 Million to

a Record High of 5.4 Million Households

4500 

4600 

4700 

4800 

4900 

5000 

5100 

5200 

5300 

5400 

5500 

1991 1993 1995 1997 

Households in thousands 

Past definition of needs 

Worst case needs as now defined 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

•	 Since 1991, despite a robust economic recovery, the number of families with worst case 

needs for rental assistance rose by at least 500,000, an increase of 12 percent, compared 

to 7 percent for all households. 

The new estimates show that the number of households with worst case needs rose from 4.8 

to 5.4 million between 1991 and 1997, an increase of 12 percent, despite the economic 

expansion. Because growth in worst case needs exceeded that of very-low-income renters, 

the share of very-low-income renters with worst case problems also rose, from 34 percent in 

1991 to 37 percent in 1997. As Exhibit 9 shows, the increase in worst case needs resulted 

from growth in severe rent burdens among unassisted very-low-income renters, from 4.5 

million households in 1991 to 5.1 million in 1997.10 

10 Although the 1997 counts of severe physical problems are presumably more accurate (as discussed above 

in Exhibit 1), they should not be compared directly with earlier data because of 1997 question changes. The 

1991–95 data clearly show a downward trend in numbers of severely inadequate units. 

16
Exhibit 9

The Number With Worst Case Needs Rose Because More Families Paid More than

Half of Their Income for Rent

Percent 

Households 

(in thousands) 

Percent 

Change 

1991 1993 1995 1997 1991 1993 1995 1997 1991–97 

Very-low-income renters 100 100 100 100 14,013 14,749 14,563 14,519 3.6 

Priority problems 34.2 35.2 35.5 37.1 4,795 5,196 5,174 5,380 12.2 

Severe physical 

problems 4.2 3.1 2.6 3.3 583 453 372 479 −17.7 

Rent burden >50% 31.8 33.2 33.8 34.9 4,456 4,903 4,927 5,066 13.7 

Rent burden only 25.3 27.5 28.1 28.6 3,539 4,055 4,099 4,156 17.4 

Other problems 24.8 24.3 23.3 23.5 3,475 3,577 3,396 3,407 −2.0 

No problems 12.9 11.7 11.8 11.4 1,803 1,718 1,716 1,652 −8.3 

Assisted 28.1 28.9 29.4 28.1 3,940 4,257 4,278 4,078 3.5 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

Comparison of 1995–97 changes in assistance is also complicated by the major changes in 

AHS assistance questions discussed in Exhibit 1. Nevertheless, the apparent decrease in 

numbers of very-low-income renters receiving assistance may have in fact occurred because 

a decrease would be consistent with two developments during this period: no additional 

“incremental” vouchers or certificates were issued, and Federal preferences directing those 

assisted units that became available from turnover to worst case households were 

suspended.11 

As will be discussed below in Finding 9, other strong evidence implies that worst case needs, 

if they could be consistently measured in both years, may well have increased by more than 

205,000 between 1995 and 1997. This conclusion comes from examining severe rent burdens 

among all very-low-income renters, including both those with no assistance and those 

reporting some type of rental assistance. (Because of the major changes in the AHS 

assistance questions between 1995 and 1997, comparing estimates that do not rely on 

answers to those questions in either year is likely to provide a more accurate picture of 

changes over time than is possible from our effort in Exhibit 8 and elsewhere in this report to 

make reestimates of unassisted renters in 1995 and earlier years as comparable to the 1997 

11 The Federal preferences were suspended by the appropriations acts for fiscal years 1996, 1997, and 1998. 

As explained in Exhibit 5, they were replaced in 1998 by explicit targeting of assistance to households with 

incomes below 30 percent of area median income. 

17
estimates as possible.) The number of all very-low-income renters who pay more than half of 

their incomes for rent rose by 500,000 between 1995 and 1997 to reach an all-time high of 

6.4 million. This increase of 500,000 among very-low-income renters in the problem that 

forms the main component of worst case needs suggests strongly that the measured increase 

of 205,000 in worst case needs discussed above is an underestimate. 

To summarize, the fact that worst case needs continue to rise, rather than decline, during a 

period of strong economic growth demonstrates that acute housing needs, particularly for the 

poorest families, constitute a persistent problem not eliminated by economic growth. Instead, 

strong economic growth appears to exacerbate housing affordability problems for the poorest 

families as rents are driven upward by rising demand. 

Finding 2: Families with worst case needs are working harder than ever. 

Between 1991 and 1997, despite the economic recovery, worst case 

needs increased more than three times as quickly for very-lowincome renters with full-time earners than for all other very-lowincome renters. 

The rise in worst case needs does not reflect lack of effort on the part of low-income 

workers. Consistent with the economic recovery and welfare reform, there is clear evidence 

of increased work effort among all lower-income households. However, even in this period 

of economic expansion, full-time work may not provide families with sufficient income to 

afford a decent place to live. Thus, even though the number of lower-income families that are 

working has increased, the number of working families with worst case needs has risen as 

well. 

•	 Worst case needs increased faster for very-low-income renters with full-time earners than 

for other households. Between 1991 and 1997, the number of such households increased 

by 28 percent. This growth is more than three times the growth rate in worst case needs 

for all other very-low-income households, which over the same period rose by 8 percent. 

Among all worst case households, including those with elderly or disabled heads of 

household, the share for whom earnings were the main source of income rose from 48 

percent in 1991 and 47 percent in 1995 to 54 percent in 1997. In 1997, almost 3 million 

worst case households had earnings as their main source of income; 2.3 million were 

working more than half-time at the minimum wage. Over 1.4 million worst case households 

had earnings equivalent to those of full-time work at the minimum wage.

12 

As Exhibit 10 shows, the number of worst case households with earnings equivalent to those 

of a full-time worker earning the minimum wage rose steadily during the economic 

expansion of the 1990s, and worst case needs increased faster for those with full-time 

earnings than for other households. Since 1991, the number of such households increased by 

28 percent. This growth is more than double the rate of 12 percent for all households with 

12 To treat earnings consistently over time, they were compared against the current equivalent of full-time 

work at the 1993 minimum wage of $4.25 per hour, or $7,500 per year in 1993 dollars. 

18
worst case needs over the same period. Between 1995 and 1997, worst case needs among 

households with full-time earnings grew only among families with children, accelerating by 

17 percent in only 2 years. 

Exhibit 10

Between 1991 and 1997, Growth in Worst Case Needs Was Highest

Among Working Families with Children

Worst Case Needs by Type of Household (in thousands) 

Number of Households Percent Change 

Household Type 1991 1993 1995 1997 1991–97 1995–97 

All households (renter and owner) 93,146 94,723 97,693 99,487 7 2 

Worst case needs households 4,795 5,196 5,174 5,380 12 4 

Working full time* 1,122 1,200 1,361 1,431 28 5 

Families with children 593 639 650 763 29 17 

Other households** 529 561 711 668 26 −6 

Not working full time 2,362 2,702 2,547 2,557 8 0 

Families with children 1,336 1,535 1,355 1,287 −4 −5 

Other households 1,026 1,167 1,192 1,270 24 7 

Elderly or disabled 1,311 1,294 1,266 1,392 6 10 

*Earnings exceed full-time work at minimum wage.

**Non-elderly and no disability (not reporting SSI income).

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys

•	 One in three families with children who have worst case needs have earnings 

representing full-time work at or above the minimum wage. Growth in worst case needs 

was fastest among working families with children. Between 1995 and 1997 alone the 

number of worst case working families with children increased by 17 percent, while 

between 1991 and 1997 the number with needs grew by 29 percent. 

Growth in worst case needs among households with full-time earners was higher for families 

with children than other household types, particularly between 1995 and 1997. Almost all of 

this increase occurred among families with children living in central cities. Between 1991 

and 1997, the number of worst case families with full-time earners rose by two-thirds in 

central cities, from 250,000 to 406,000. Minorities were responsible for all of this increase, 

as the number of working worst case families rose by 74 percent among Hispanics and by 31 

percent among African-Americans. 

Other indicators of work effort rose among families with children as well. Among worst case 

families with children, the share having earnings as their main source of income rose by one19
fifth between 1995 and 1997 so that by 1997 fully 60 percent of worst case families with 

children had earnings as their main source of income. Those families earning more than halftime work at the minimum wage increased from 45 to 51 percent, and those earning more 

than full-time work at the minimum wage also rose, from 31 percent to 37 percent of families 

with children and worst case needs. At the same time the share of worst case families with 

children who reported receiving any income from welfare or SSI disability payments fell, 

from 44 percent to 32 percent. 

As Exhibit 11 illustrates, comparing all low-income renter families with children against 

equivalent results for 199513 shows that work efforts rose and welfare income dropped in 

particular among families with children with income below 30 percent of area median 

income. (At income above 30 percent of median, almost all low-income families with 

children have earnings greater than the equivalent of full-time work at minimum wage.) 

Between 1995 and 1997, each of the indicators of work effort shown in the exhibit rose by at 

least 10 percentage points among families with incomes between 20 and 30 percent of area 

median. Slight increases also occurred for those with incomes below 20 percent of median. 

Exhibit 11

Increasing Numbers of Extremely-Low-Income Families

with Children Are Working

Income as Percent 

of Area Median 

0–20 21–30 31–50 51–60 61–80 

Renters with children (in thousands) 2,374 1,355 2,512 988 1,564 

Percent with earnings: 

$3,750+ (half time at minimum wage) 19 79 91 96 97 

$7,500+ (full time) 6 59 87 96 97 

$11,250+ 0 21 71 90 96 

Percent with some AFDC/SSI income 52 28 16 11 8 

Percent with earnings as primary income 

source 

35 76 88 95 95 

Thousands of working families 462 1,067 2,278 952 1,525 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey; Appendix Table A–12 

•	 Working households with worst case needs were increasingly likely to have “extremely” 

low incomes, that is, incomes below 30 percent of area median income. Over 2 million 

extremely-low-income renters with earnings as their main source of income had worst 

case needs, an increase of 400,000—or one-fourth—between 1995 and 1997. 

13 Exhibit 11 of Rental Housing Assistance—The Crisis Continues shows equivalent 1995 results. 

20
The increased work effort among the lowest-income renters had the effect of markedly 

increasing the number of working worst case renters with income below 30 percent of area 

median. As discussed below (Finding 4), both the proportion and number of all worst case 

renters that have extremely low incomes have increased significantly during the 1990s. 

Between 1995 and 1997, the rise in working worst case renters with extremely low incomes 

was especially dramatic. In 1997, over 2 million extremely-low-income households with 

earnings as their main source of income had worst case needs, an increase of 400,000—or 

one-fourth—in the 2 years between 1995 and 1997. As Exhibit 12 shows, almost one million 

of these households were families with children. 

Exhibit 12

More Than 2 Million Unassisted Working Renters with Worst Case Needs

Have Extremely Low Incomes

1,084 

936 

480 

301 

0 

200 

400 

600 

800 

1,000 

1,200 

Thousands of non-elderly worst case households 

with earnings as pri

mary income source 

0–30% AMI 31–50% AMI 0–30% AMI 31–50% AMI 

Families with children Other households with heads 

ages 18–61 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

Worst Case Households by Family Type and Income, 1997 

In sum, as adults in families move to work as a result of welfare reform and other factors, 

they may not earn sufficient additional income to overcome worst case needs for housing 

assistance. Instead, as extremely-low-income individuals enter the workforce, they still often 

have worst case needs for rental assistance. In fact, the transition to work can generate new 

financial pressures and expenses, including the cost of child care and the cost of 

transportation to and from work. With rent already consuming over half of their incomes, the 

vast majority of worst case needs households face enormous difficulties in affording these 

additional expenses. 

21
Finding 3: The affordable housing stock, as measured by the number of total 

rental units that are affordable for families with incomes at 30 

percent of area median income, continues to shrink. 

Worst case needs have continued to increase despite greater work efforts among very-lowincome families because rents are rising more quickly than incomes, particularly for 

households at the lower end of the income distribution. The critical stock of housing units 

that are affordable to extremely-low-income households is most vulnerable. 

•	 The housing stock most needed by renters with worst case needs—that is, rental units that are 

affordable for extremely-low-income households without rental assistance—continues to 

shrink. The number of rental units affordable to extremely-low-income families dropped by 5 

percent between 1991 and 1997, a decline of over 370,000 units. 

Between 1995 and 1997, as the total rental stock grew slightly and the national rental 

vacancy rate rose from 7.2 to 7.8 percent, the number of rental units affordable to extremelylow-income families dropped by 66,000, continuing a long-term trend of decline in such 

units. These are units affordable to households at 30 percent of area median income, 

assuming that households spend no more than 30 percent of their income for rent. As Exhibit 

13 illustrates, since 1991 the number of such affordable rental units decreased by 372,000 

units, a 5-percent drop overall in 6 years. This significant decline occurred among all units 

affordable to extremely-low-income families, including private market units and assisted 

units.

14 

•	 The gap between extremely-low-income families and units they can afford is large and 

growing. In 1997 for every 100 households with incomes at or below 30 percent of 

median income, there were only 36 units both affordable and available to them. 

The growing scarcity of affordable units is exacerbated by continuing increases in the 

number of extremely-low-income families, thus further widening this severe affordability 

gap. Between 1995 and 1997, the number of renter households with incomes below 30 

percent of the area median increased from 8.61 million to 8.87 million. By 1997, one out of 

four renter households had incomes at or below 30 percent of their area median income. 

14 Past worst case needs reports also highlighted declines in numbers of private market unassisted units that 

are affordable to these families. However, because of changes in questions about assisted housing in the 

1997 American Housing Survey, the data on all affordable units provide a more reliable comparison with 

past surveys than would be possible from examining private market units alone. 

22
Exhibit 13

The Supply of Rental Units Affordable to

Extremely-Low-Income Families Continues to Shrink

Units Affordable to Income Less than 30 Percent of Area 

Median, Assuming 30 Percent of Income Spent on Rent 

6.2 

6.4 

6.6 

6.8 

7 

1991 1993 1995 1997 

“Affordable” refers to units affordable to households at or below 30 percent of area median income,

assuming that they spend no more than 30 percent of their income on rent.

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys

The continued increase in demand coupled with the diminishing supply of affordable units is 

exacerbating the mismatch between the number of renter households at or below 30 percent 

of median income and the number of housing units affordable to them. In 1997, for every 100 

extremely-low-income renter households, there were only 76 units with rents that were 

possibly affordable to them.15 As the top line of Exhibit 14 shows, this summary indicator of 

affordable supply relative to demand has been dropping steadily since 1991, when it was 85 

units for every 100 households. 

15 As discussed in Rental Housing Assistance at a Crossroads, HUD’s 1996 report to Congress, this 

summary measure of mismatch compares the number of extremely-low-income renters against the number 

of units that can be rented at 30 percent of the extremely-low-income cutoff, that is, 30 percent of the area 

median income, adjusted for household size. Both units with no cash rent and renters living in no-cash-rent 

units are excluded from this comparison. This ratio provides an upper-bound estimate of “affordable” units 

because, although all units are affordable by definition to households at the income cutoff, they are not 

necessarily affordable to households with incomes below 30 percent of area median income. 

23
Exhibit 14

The Mismatch Between Extremely-Low-Income Renters

and Units Both Affordable and Available to Them

Is Worse and Widening Even Faster

0 

20 

40 

60 

80 

100 

1991 1993 1995 1997 

Affordable and available units 

All affordable units 

Affordable rental units per 100 extre

mely-low-income renter households 

The top trend line for affordable units shows for each 100 renter households at or below 30 percent of area 

median income the number of units those extremely-low-income households can afford, assuming they pay 

no more than 30 percent of their income for rent. 

The bottom trend line for affordable and available units shows the ratio per 100 extremely-low-income 

renter households of affordable units, as defined above, that are either vacant for rent or already occupied 

by extremely-low-income households. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

24
As dramatic as this disparity between the number of extremely-low-income renters and the 

number of affordable units appears, the trend shown in the top line of Exhibit 14 actually 

understates the extent of a rapidly worsening problem. This is because a large number of 

“affordable” units are not in fact available for rent by families who most need them, but are 

instead occupied by higher-income households. In 1997, the number of affordable units that 

were actually available for rent to such families—that is, units that were either already rented 

by extremely-low-income households or vacant for rent—was only 36 units for every 100 

families. Even worse, this ratio represents a serious decline over just 2 years—because in 

1995, 44 units were both affordable and available for rent for every 100 families. Thus, in 

just 2 years, we lost almost one out of five units that were affordable to extremely-lowincome families and were actually rented by such families or vacant and for rent. Overall, 

this important indicator declined by 23 percent since 1991. Compared to the need for such 

units, the affordable and available stock is eroding at an alarming rate. 

•	 In a modest reversal of the disturbing loss in very-low-rent units found between 1993 and 

1995, between 1995 and 1997 there was a 2-percent increase in the number of rental 

units affordable to incomes at or below 50 percent of median. 

One of the more disheartening results highlighted in HUD’s last worst case report was the 

sharp loss of private market rental units affordable to incomes at or below 50 percent of area 

median income. Between 1993 and 1995, the number of private market units affordable to 

very-low-income renters dropped by almost 900,000. This loss was particularly alarming 

because two-thirds of the units lost had rents affordable to incomes between 31 percent and 

50 percent of median, a rent range in which the number of units had previously been growing 

on average across the Nation.16 This finding showed that losses of affordable rental units had 

not only increased greatly in number between 1993 and 1995, but also had expanded to affect 

rent categories higher than rents affordable to 30 percent of area median for the first time. 

Because of the 1997 change in AHS subsidy questions, this report must examine changes in 

all units affordable to these income categories, rather than focusing on private market units 

by excluding subsidized or no-cash-rent units. As Exhibit 15 shows, between 1993 and 1995 

this category had changes quite similar to those shown in the previous report for private 

market units: the total of all units affordable below 50 percent of median income also 

dropped by some 900,000 units between 1993 and 1995, from 16.7 to 15.8 million, and the 

decline was larger (from 9.8 to 9.2 million units) for units with rents affordable to incomes 

between 31 percent and 50 percent of median than for units with less costly rents. 

16 As HUD’s 1996 report to Congress documented (Table A–17), between 1985 and 1993 private market 

units affordable below 30 percent of area median had dropped by 19 percent, but the number of units in the 

range affordable to incomes between 31 and 50 percent of median had grown modestly, by 2 percent. 

25
Exhibit 15

Rental Units Affordable to Very-Low-Income Families Grew Again

to Offset Some of Earlier Loss

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 

American Housing Surveys 

0 

2,000 

4,000 

6,000 

8,000 

10,000 

12,000 

14,000 

16,000 

18,000 

1991 1993 1995 1997 

Units by incomes to which they are affordable 

(in thousands) 

0–30% AMI 31–50% AMI 

Between 1995 and 1997, however, there was a welcome turnaround, as the number of rental 

units affordable to incomes at or below 50 percent of median rose by 340,000 overall for a 

modest increase of 2 percent. This rise occurred because the number of units with rents 

affordable to the 31-50 percent of income range increased significantly, by over 400,000. 

This improved situation may well reflect units added to the stock with subsidies from HOME 

and LIHTC dollars. Although units in this range are usually not affordable without rental 

assistance to the most needy extremely-low-income group, they should increase the supply of 

units useable with vouchers in most locations. 

While this recent increase in units affordable to very-low-income renters is far preferable to 

continued losses, it nevertheless should be viewed in the broader context of an overall 

decline in the number of affordable units since 1993. When the large losses in affordable 

units between 1993 and 1995 are taken into account, over just 4 years there has been a net 

loss of 540,000 units that are affordable to households with incomes at or below 50 percent 

of the area median income, with most of the decline occurring in the critical range affordable 

to families with extremely low incomes. Although the reversal of previous losses in the range 

affordable to incomes between 31 and 50 percent of area median is welcome, the squeeze on 

the most needy extremely-low-income families continues to worsen. 

Finding 4: Between 1991 and 1997, worst case housing needs became more 

concentrated among households with incomes below 30 percent of 

26
the area median income. By 1997, over three-fourths of those with 

worst case needs had extremely low incomes. 

In a trend with important implications for rental housing policy and program implementation, 

the increasing demand for shrinking supplies of affordable units meant that, by 1997, severe 

housing problems were appreciably more concentrated among families with extremely low 

incomes than they had been in 1991. The total number of renter households with “priority” 

housing problems of severe rent burdens or severe physical housing problems in 1997 

includes the 5.4 million very-low-income renters with worst case needs.

17 Another 685,000 

renters also had severe problems, although they are not defined as having worst case needs 

because their incomes were above 50 percent of the area median. 

As Exhibit 16 illustrates, in the 6 years between 1991 and 1997, the extremely-low-income 

share of all renters with severe priority problems rose by four percentage points, from 65 to 

69 percent of the total. By contrast, in each higher income category, the share of renters with 

severe problems dropped between 1991 and 1997. By 1997 only 6.2 percent of renters with 

priority problems fell in the “low” income range of 51–80 percent of median made newly 

eligible for some rental assistance by QHWRA, down from 7.7 percent 6 years earlier. Over 

that period, the share of renters with priority problems also dropped in the income range 

between 31 and 50 percent of area median. 

When we focus only on worst case needs among very-low-income renters, we find that worst 

case needs became more concentrated among extremely-low-income renters because needs 

grew most quickly among this income group between 1991 and 1997. Over this period, the 

number of households with worst case needs grew by 16 percent among renters with incomes 

below 30 percent of area median. Among renters with income between 31 and 50 percent of 

area median income, by contrast, needs were essentially stable during these 6 years, growing 

by only 1 percent. In sum, by 1997, among those very-low-income renters with worst case 

needs, over 77 percent of the total (almost 4.2 million families) had extremely low incomes, 

up from 74 percent in 1991. 

17 The term “priority problems” is used because, before 1995, Federal preferences for admission were given 

to households with these problems. 

27
Exhibit 16

Priority Problems Became More Concentrated Among

Extremely-Low-Income Renters During the 1990s

69% 

20% 

3% 3% 2% 3% 

22% 

4% 3% 2% 4% 

65% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

0–30 31–50 51–60 61–80 81–100 101+ 

Income as percent of HUD-adjusted median family income, 1997 

Percent of priority problems in income group 

1997 1991 

Source: HUD-PD&R tabulations from the 1991 and 1997 American Housing Surveys 

•	 More than two-thirds of unassisted extremely-low-income renters have worst case needs 

for rental assistance. By contrast, the likelihood of having severe housing problems is 

much less among renters with incomes above 30 percent of area median income. Only 21 

percent of unassisted renters with incomes between 31 and 50 percent of area median 

have worst case needs. Fewer than 6 percent of renters with incomes between 51 and 80 

percent of area median income experience priority problems. 

Households with extremely low incomes not only comprise the vast majority of renters with 

priority housing problems, but they are also in the only income groups highly likely to have 

these most severe problems. As Exhibit 17 shows, almost three-fourths of unassisted families 

with incomes below 20 percent of area median income have priority problems, as do twothirds of those with incomes between 21 and 30 percent of area median. 

28
Exhibit 17

Renters with Income Below 30 Percent of Median,

Especially Those with Income Below 20 Percent of Median,

Are the Only Income Groups Likely to Have Severe Housing Problems

Number of Households, in thousands 

Percent of Median 0–20 21–30 31–40 41–50 51–60 61–70 71–80 81–100 101+ 

Unassisted With Priority 

Problems 2,576 1,585 835 383 187 120 70 102 206 6,065 

Unassisted With Other 

Problems 348 580 1,101 1,378 1,092 766 521 689 1,017 7,492 

Total Unassisted 3,478 2,393 2,235 2,336 2,112 1,936 1,646 3,366 8,890 28,392 

“Priority problems” are defined as substandard housing, rent burdens over 50 percent of income, 

homelessness, or involuntary displacement. These AHS tabulations count only severe structural problems 

and rent burdens. 

“Other problems” include rent burdens between 30 percent and 50 percent of income, crowding, or moderate 

structural problems. 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

0–20 21–30 31–40 41–50 51–60 61–70 71–80 81–100 101+ 

Household income as percent of HUD-adjusted median family income, 1997 

Percent of unassisted renters in income group 

Other problems 

Priority problems 

29
Among households with incomes above 30 percent of area median income, by contrast, 

priority problems are much less likely. For those with incomes 31 to 40 percent of area 

median income, fewer than one-half (three of every eight) have priority problems, while for 

incomes 41 to 50 percent of area median, only one of every six renter households has priority 

problems. In the group just above the very-low-income cutoff that is still eligible for units 

financed by HOME or the LIHTC (51 to 60 percent of area median income), less than 9 

percent of renter households have priority problems. 

•	 Federal rental assistance programs continue to be well targeted to the extremely-lowincome groups most likely to have worst case needs if they did not receive assistance. 

Seven of 10 assisted renters have incomes below 30 percent of area median income. 

As of 1999, Federal rental assistance programs directed 70 percent of their assistance to 

extremely-low-income renters (see Exhibit 18). In the public housing and tenant-based 

Section 8 programs, more than 70 percent of tenants had extremely low incomes, as did over 

80 percent of the occupants of projects receiving Section 8 assistance for moderate 

rehabilitation. In other Section 8 projects, 70 percent of tenants had extremely low incomes. 

The rental assistance programs thus remain quite well targeted to income groups that are 

most likely to have worst case needs if they do not receive assistance. 

Each program, however, had a somewhat lower share of extremely-low-income tenants in 

1999 than had been the case in the 1997 program data tabulated in the last worst case 

report.18 This change may reflect increased income among existing tenants or it may reflect 

new admissions of higher-income families in response to the incentives for increased income 

mixing incorporated in QHWRA. 

18 See Exhibit 18, p.24, of Rental Housing Assistance—The Crisis Continues. 

30
Exhibit 18

Rental Housing Assistance Programs Are Well Targeted to the

Extremely-Low-Income Groups Most Likely to Have Priority Problems

69% 

3% 3% 5%

20% 

70% 

24% 

3% 2% 1%

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

0–30 30–50 50–60 60–80 80+ 

Household income as percent of area median income 

Percent share of total problems or 

of total assisted 

Priority problems Assisted 

Rental Assistance by Program and by Household Income as Percent of Area Median 

(Assisted Households in Thousands) 

0-30% 30-50% 50-60% 60-80% 80+% Total 

Tenant-based Section 8 

Percent of Program 

1,040 

72% 

332 

23% 

38 

3% 

21 

1% 

11 

1% 

1,441 

100% 

Moderate rehabilitation Section 8 

Percent of Program 

53 

81% 

10 

15% 

1 

2% 

1 

1% 

1 

1% 

65 

100% 

Project-based Section 8 

Percent of Program 

930 

70% 

336 

25% 

35 

3% 

16 

1% 

2 

0% 

1,319 

100% 

Public housing 

Percent of Program 

840 

73% 

236 

20% 

37 

3% 

27 

2% 

13 

1% 

1,153 

100% 

All other project-based 

Percent of Program 

84 

38% 

88 

40% 

21 

10% 

18 

8% 

8 

4% 

220 

100% 

Total assisted 

Percent of all assisted 

2,946 

70% 

1,002 

24% 

132 

3% 

83 

2% 

35 

1% 

4,198 

100% 

Priority Problems by Household Income as Percent of Area Median 

0–30% 30–50% 50–60% 60–80% 80%+ Total 

Priority Problems 4,161 1,218 187 190 309 6,065 

Percent of Priority Problems 69% 20% 3% 3% 5% 100% 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey and 1999 program data (MTCS 

& TRACS) 

31
• Many assisted families have earnings as their primary source of income. 

Current housing assistance programs have many tenants who work, particularly among 

households who are neither elderly nor disabled. As would be expected, work is not common 

among either the elderly or non-elderly adults with a disability, who comprise close to half of 

the 4.2 million assisted households for which HUD has data on tenant characteristics. Among 

the 2.2 million households with neither elderly members nor members with disabilities, 

however, 44 percent have earnings as their primary source of income. 

As Exhibit 19 shows, shares of households who rely on earnings rise with income. At each 

income level except the lowest, families with children present are more likely to have 

earnings as their primary source of income than other households with heads 18–62 and no 

disabled members. 

The data in Exhibit 19 are not directly comparable to earlier extracts from HUD data on 

tenant characteristics for several reasons and thus do not allow us to determine if earnings are 

increasing.

19 But two developments suggest that the employment rate is rising among families 

in public and assisted housing. State by State, non-elderly, non-disabled heads of household 

in public housing show consistently lower welfare receipt and higher employment levels in 

1999 than in 1997.20 In addition, internal reports show that tenant contributions to rent are 

rising in both the public housing and the tenant-based Section 8 programs, and the most 

probable source of such increased contributions is increases in earned income. 

19 Data from extracts taken at different times are not comparable for two reasons: 1) Changes in reporting 

rates. The agencies and owners reporting to the MTCS/TRACS system in 1999 differ from those reporting 

in 1997, and overall reporting has improved to roughly 85 percent. As employment rates differ by agency, 

changes in the composition of reporting entities may change the estimated overall employment rate. 

2) Changes in program size estimates. Accounting system improvements in the past 2 years allow improved

estimates of the number of tenants actually residing in public and assisted housing. To construct the tables

with less than perfect reporting, we inflate the proportions employed among the number of tenants actually

reported to reach the estimated number of tenants using HUD subsidies. Employment rates vary from one

program to another, so changing the proportions in each program also changes the estimated overall

employment rate. 20 Jill Khadduri, Mark Shroder, and Barry Steffen, “Can Housing Assistance Support Welfare Reform?”

1999.

32
Exhibit 19

Many Assisted Families Have Earnings as Their Primary Source of Income

16% 

21% 

48% 

54% 

68% 

75% 75%

79% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

Families with children Other nondisabled households with 

heads ages 18–61 

Percent with earnings as pri

mary source of income 

0–20% 21–30% 31–50% 51–60% 

Income as % of Area Median Income 

Source: HUD-PD&R tabulations from 1999 program data (MTCS & TRACS); Table A–13 

33
Finding 5: Worst case housing needs became more concentrated among 

minority households during the 1990s. Increases were especially 

high for Hispanic households and working minority families with 

children. 

Between 1995 and 1997, the measured increase of 200,000 in worst case needs was evenly 

divided between non-Hispanic whites and Hispanic households, with needs for each group 

growing by 100,000. Over the 6 years of economic expansion since 1991, however, 

Hispanics have experienced by far the highest growth in worst case needs. Between 1991 and 

1997, needs grew at average rates among African-American households and remained 

essentially stable among white very-low-income renters. 

•	 Between 1991 and 1997, the number of Hispanic households with worst case needs 

increased by 45 percent, while worst case needs among working families with children 

rose by 74 percent. 

Over the 6 years between 1991 and 1997, worst case needs among Hispanic households rose 

by more than 300,000 households and in 1997 exceeded 1 million (see Exhibit 20). This 

growth was spurred in part by rapid expansion in total numbers of Hispanic households, 

which increased by 36 percent, and by even faster growth among Hispanic very-low-income 

renter households, which rose by 45 percent from 2 million to 2.7 million families. 

Nevertheless, worst case needs among Hispanic renters grew even more rapidly than 

Hispanic households, and the share of Hispanic very-low-income renters with worst case 

problems rose from 35 to 38 percent. The increase in worst case needs was higher still for 

working Hispanic families with children (74 percent). 

Exhibit 20

Growth in Worst Case Needs During the 1990s Was Highest Among

Hispanics and Blacks

Thousands of Households 

with Worst Case Needs Percent Change 

1991 1993 1995 1997 1991–97 1995–97 

Non-Hispanic white 2,888 2,970 2,835 2,939 2 4 

Non-Hispanic black 973 1,070 1,107 1,097 13 –1 

Hispanic origin 711 872 930 1,033 45 11 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing 

Surveys; Table A–8 

Hispanic worst case households more often had children present than other worst case 

households. Over three-fifths of these households were families with children under 18, 

while only 13 percent were elderly. Hispanics also had higher rates of crowded housing than 

other worst case households, with over one-fifth of all Hispanic households and over one34
third of the households with children living in crowded conditions. Despite such crowding, 

severe rent burden was the only housing problem for 64 percent of Hispanic worst case 

households. 

•	 Between 1991 and 1997, the number of African-American households with worst case 

needs rose by 13 percent, slightly above the growth rate of 11 percent in all AfricanAmerican households. Among working families with children, worst case needs rose by 

31 percent. 

Among African-Americans, worst case needs rose by almost 100,000 between 1991 and 

1993, but since 1993 they have hovered around 1.1 million. Although this growth rate of 13 

percent between 1991 and 1997 is only slightly above the average growth of 12 percent in 

worst case needs during this 6-year period, very-low-income African-Americans also became 

more likely to experience worst case problems. As the total number of African-American 

very-low-income renters grew by only 2 percent, from 3.5 to 3.6 million, the share suffering 

worst case problems rose almost 9 percent, from 35 to 38 percent. 

Like Hispanics, the majority (52 percent) of African-American households with worst case 

needs include children. Crowding is low in these households, however, and 70 percent of the 

African-Americans with worst case housing needs have only a severe rent burden. AfricanAmericans also experienced above-average growth in the number of working families with 

worst case needs, which rose by 31 percent between 1991 and 1997. 

Among non-Hispanic whites, worst case needs remained essentially stable, at around 2.9 

million, throughout the 1990s. This growth rate of 2 percent mirrored that occurring among 

all white households. Almost one-third of white households with worst case needs (890,000 

households) are elderly, four-fifths of them living alone. The largest group of white 

households with worst case needs, almost 1 million households, contains “non-elderly 

unrelated individuals,” who are individuals under 62 years old who are either living alone or 

with other nonrelatives. As discussed below in Finding 7, a sizable number of these 

households may have disabled members. 

35
Finding 6: Poor families living in the suburbs most often face worst case 

needs. Both very-low-income renters and extremely-low-income 

renters remain more likely to have worst case problems in the 

suburbs than those living elsewhere. Over one-third of worst case 

households live in the suburbs. Reflecting continued population 

and job growth there, declines in units with rents affordable to 

extremely-low-income families were greatest in the suburbs during 

the 1990s. 

•	 Very-low-income renters have a greater likelihood of having worst case needs in the 

suburbs than very-low-income renters who live in central cities or outside metropolitan 

areas. Two-fifths, over 40 percent, of all very-low-income renters living in the suburbs 

have worst case needs. More than one in three worst case renters with worst case needs, 

over 1.8 million households, lives in the suburbs. 

In 1997, slightly over half of worst case needs households, 2.7 million, lived in central cities, 

where there are generally larger concentrations of poverty and lower rates of homeownership 

than outside cities. Nevertheless, very-low-income renters living in the suburbs have the 

greatest likelihood of having worst case needs. Over 40 percent of very-low-income renters 

living in the suburbs had worst case needs for assistance, as compared to 37 percent in 

central cities and 32 percent in non-metropolitan areas (see Exhibit 21). Worst case problems 

were also most prevalent in the suburbs among extremely-low-income renters: fully 69 

percent of extremely-low-income renters living in the suburbs had worst case needs for 

assistance, as compared to 58 percent in central cities and 54 percent in nonmetropolitan 

areas. In part, these differentials reflect the fact that renters were less likely to receive rental 

assistance in the suburbs: in 1997, 25 percent of suburban very-low-income renters reported 

housing assistance compared to 29 percent in both cities and nonmetropolitan areas. 

36
Exhibit 21

Very-Low-Income Renters Are Most Likely to Have Worst Case Problems in the

Suburbs and Least Likely to Receive Assistance There

37% 

10% 

29% 

41% 

12% 

25% 

32% 

15% 

29% 

0% 

5% 

10% 

15% 

20% 

25% 

30% 

35% 

40% 

45% 

With worst case needs No problems Assisted 

Share of very-low-income renters 

Cities 

Suburbs 

Nonmetro 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey; Table A–10 

Between 1991 and 1997, however, the number of very-low-income renters participating in 

some rental assistance program apparently grew by 21 percent in the suburbs, while 

remaining stable in cities and dropping slightly in nonmetropolitan areas.

21 Thus, since worst 

case needs grew at average rates over this period in all three locations, the rise in suburban 

assistance may well have helped keep worst case problems from rising yet more rapidly 

there. The suburban increase in assisted households may also reflect movement by assisted 

renters closer to suburban jobs. 

21 As discussed in Exhibit 1, however, growth in housing assistance during this period is likely to be 

overstated by the AHS because of the major changes in assistance questions between 1995 and 1997. 

37
•	 Losses in units affordable to extremely-low-income renters were greatest in the suburbs 

during the 1990s, both absolutely and relatively. 

The location of high numbers of worst case renters in suburban areas of major metropolitan 

areas can be explained by a number of interrelated factors. Many suburban rental markets 

already have shortages of units affordable and available to extremely-low-income families, 

and such units are most likely to experience rent rises in neighborhoods that have newer 

housing, more owners, and higher incomes.22 

Moreover, the national decline between 1991 and 1997 in units affordable to renters with 

incomes below 30 percent of area median was greatest in the suburbs. As Exhibit 22 

illustrates, the number of units affordable to extremely-low-income renters dropped by 

almost 200,000 in the suburbs, a decline of 10 percent. Over the same period, units with such 

extremely low rents fell by 2 percent in cities and 5 percent outside metropolitan areas. 

Because suburbs are experiencing faster growth in both population and employment than 

either central cities or counties outside of metropolitan areas, such pressures on housing 

markets are likely to continue or increase, threatening the few remaining units affordable to 

the lowest-income renters there. 

22 Greater upward filtering of rents in such neighborhoods was identified in “Affordable Rental Housing: 

When to Build, When to Preserve, When to Subsidize?” a 1997 HUD-PD&R study of housing market 

dynamics in 41 metropolitan areas. 

38
Exhibit 22 

Losses in Units Affordable to Extremely-Low-Income Renters Were Greatest in 

the Suburbs, Both Absolutely and Relatively 

-73 

-198 

-101 

-250 

-200 

-150 

-100 

-50 

0 

Cities Suburbs Nonmetro 

Change in units affordable to 30 percent of area 

median income, 1991–1997 (thousands of units) 

-2% 

-10% 

-5% 

-12% 

-10% 

-8% 

-6% 

-4% 

-2% 

0% 

Cities Suburbs Nonmetro 

Change in units affordable to 30 percent of area median 

income, 1991–1997 (percent loss) 

Source: HUD-PD&R tabulations from the 1991 and 1997 American Housing Surveys 

39
Supplementary Findings 

As highlighted above, the major findings of this report are that the economic expansion of 

the 1990s has exacerbated worst case needs, significantly increasing the number of 

households with these severe problems, especially among extremely-low-income families, 

minorities, and working families with children. The increase in needs has occurred despite 

increased work effort among extremely-low-income families because of marked declines in 

the number of housing units with rents affordable to incomes below 30 percent of area 

median income. 

As the supplemental findings discussed below show, differentials in the likelihood of worst 

case needs by household type and location have changed less dramatically in the recent past. 

Nevertheless, they remain important for understanding the effects of this housing crisis and 

for wisely crafting policies to meet it. 

Finding 7: Worst case housing needs continue to be a persistent problem for 

all demographic groups. Of the 12.3 million persons with worst case 

needs, over 1.5 million are elderly and 4.3 million are children. The 

number of adults with disabilities in households with worst case 

needs remained in the range of 1.1 to 1.4 million. 

•	 Growth in worst case needs was lowest between 1991 and 1997 among the household 

types more likely to receive rental assistance, the elderly and families with children. 

While overall worst case needs grew by 12 percent during this period, the number of 

elderly households with worst case needs increased by 8 percent. The number of 

households with worst case needs increased by 6 percent among families with children. 

Between 1991 and 1997 growth in worst case needs was lowest among the groups more 

likely to be receiving rental assistance: the elderly, families with children, and non-elderly 

households with disabled persons present. Over one-third of elderly very-low-income renters 

report receiving assistance, and in 1997, 30 percent of families with children were assisted. 

While overall worst case needs grew by 12 percent during this period, the number of elderly 

households with worst case needs increased by 8 percent. The number of households with 

worst case needs increased by 6 percent among families with children. 

Worst case needs among non-elderly adults with disabilities have always been difficult to 

estimate from AHS data.23 Based on the only proxy available from the AHS (receipt of 

Supplemental Security Income by households with no children or elderly present), however, 

it appears that worst case needs among the disabled also grew at below-average rates. 

Between 1991 and 1997, the number of very-low-income renters reporting Supplemental 

Security Income who had priority problems only grew by 8 percent, while the number 

23 The 1996 worst case needs report, Rental Housing Assistance at a Crossroads, demonstrated that the 

only proxy available from the AHS, receipt of Supplemental Security Income by households with no 

children or elderly present, undercounts both adults with disabilities and those with worst case needs when 

compared to data from the Social Security Administration (SSA). Because SSA has not been able to provide 

us more recent data, the range cited in the text (1.1 to 1.4 million) assumes that the relationships between 

AHS and SSA data cited in the 1996 report still hold. 

40
reporting rental assistance grew by 23 percent. Because priority problems did not change 

significantly for this group between 1995 and 1997, worst case needs among households 

containing adults with disabilities are estimated to have remained unacceptably high—in the 

range of 1.1 to 1.4 million. 

Exhibit 23

Growth in Worst Case Needs Was Below Average for Household Types

More Likely to Be Assisted

35% 

30% 

16% 

7.8% 6.3% 

23.3% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

Elderly Families with children Other households 

Percent assisted or percent change 

% Assisted, 1997 

1991–97 growth in needs 

Source: HUD-PD&R tabulations from the 1991 and 1997 American Housing Surveys; 

Table A–4 

The only household type with above-average growth in worst case problems between 1991 

and 1997 was the residual “other household” group. Most households in this group are single 

adults younger than 62 who live alone or with nonrelatives.24 Worst case needs among this 

group, which typically has the lowest priority for rental assistance, grew by 23 percent 

between 1991 and 1997, rising from 1.6 to 1.9 million. 

•	 Very-low-income elderly households are increasingly likely to have a worst case housing 

need, 36 percent in 1997 compared with 31 percent in 1995. Families with children 

became more likely to have worst case needs as well. Among such households, this 

likelihood rose to 33 percent in 1997 from 31 percent in 1991. 

Despite their slower growth in number of households with needs, both very-low-income 

elderly households and very-low-income families with children became more likely to 

experience worst case needs. While the number of very-low-income elderly renters dropped 

modestly between 1991 and 1997, those remaining in this income group became increasingly 

24 Because the AHS proxy for disabled adults is known to be low, some of the persons in this group are 

probably disabled. 

41
likely to have a worst case problem, 36 percent in 1997 compared with 31 percent in 1995. 

The number of very-low-income families with children did not grow either, but they became 

more likely to have worst case needs as well. Among such households, this likelihood rose to 

33 percent in 1997 from 31 percent in 1991. Among other household types, the probability of 

having worst case needs dropped somewhat over this 6-year period. 

Finding 8: Very-low-income renters in the West continue to be most likely to 

have worst case problems and least likely to receive any type of 

housing assistance. During the 1990s, however, the number of verylow-income renters with worst case needs for assistance increased 

most rapidly in the Northeast. 

The 1990 Census showed that worst case needs were more likely then in States and 

metropolitan areas in the West and Northeast regions.

25 Similarly, shortages in housing 

affordable to extremely-low-income renters were also more severe in these locations, with 

worst case needs highly correlated to such shortages. Although sharp differences by location 

within regions have doubtless persisted since 1990, the regional trends documented by the 

AHS show that regional differences in the probability of worst case needs among very-lowincome renters narrowed during the 1990s, as the share of very-low-income renters with 

worst case needs fell in the West and rose in the Midwest and South. 

•	 Two-fifths (40 percent) of very-low-income renters in the West, 1.5 million households, 

had worst case problems in 1997. Worst case problems were also common in the 

Northeast, where they occurred among 39 percent of very-low-income renters, or 1.3 

million households. 

In 1997, very-low-income renters were most likely to have worst case problems in the West 

and the Northeast, where such needs for rental assistance occurred among two-fifths of 

eligible renters (see Exhibit 24). Worst case needs were least common and least likely in the 

Midwest, where they were experienced by 960,000 households (33 percent). Because it is the 

largest region, the South had the greatest number of worst case households, with 1.6 million 

representing 36 percent of those eligible. 

25 State data on worst case needs and affordable housing shortages were reported in HUD’s 1994 worst case 

report, Worst Case Needs for Housing Assistance in the United States in 1990 and 1991. The 1990 data 

were also analyzed by Amy Bogdon, Joshua Silver, and Margery Turner of the Urban Institute in National 

Analysis of Housing Affordability, Adequacy, and Availability: A Framework for Local Housing Strategies. 

42
Exhibit 24

During the 1990s, Worst Case Needs Were Most Likely in the West, But They Grew

Most Quickly in the Northeast

Northeast Midwest South West 

Percent of very-low-income renters in 1997 

With worst case needs 39 33 36 40 

Assisted 34 31 21 23 

Percent growth in worst case needs, 1991–97 22 0 11 14 

Source: HUD-PD&R tabulations from the 1991 and 1997 American Housing Surveys; Table A–9 

Between 1991 and 1997, the number of households with worst case problems grew most, by 

over 200,000, in the Northeast, as the probability among very-low-income renters of having 

worst case needs increased there from 34 to 39 percent. Worst case needs also mounted in 

the South, from 1.5 to 1.6 million, and became more likely there as well. In the West, the 

number of households with unmet needs also rose, from 1.3 to 1.5 million. However, this 

increase occurred because of rapid growth in the number of very-low-income renters (from 

3.1 to 3.8 million), and the likelihood of worst case problems among very-low-income 

renters actually fell, from 43 to 40 percent. In the Midwest, the number of households with 

worst case problems was essentially the same in 1997 as in 1991 because of two offsetting 

trends: although the share of very-low-income renters with worst case problems rose from 29 

to 33 percent, the total number of very-low-income renters fell by 400,000. 

•	 In the West, supplies of rental units affordable to renters with extremely low incomes fell 

to a new low: there were only 56 affordable units for every 100 extremely-low-income 

renter households needing them. Shortages were almost as severe in the Northeast, where 

there were 68 affordable units for every 100 extremely-low-income renter households 

needing them. 

Regional differences in worst case needs mirror differences in shortages of housing 

affordable to extremely-low-income renters: the greater the shortage the higher the 

probability of worst case needs. In 1997, extremely-low-rent units were in shortest supply in 

the West, with only 56 affordable units for every 100 extremely-low-income renter 

households needing them, and the Northeast, with 68 units per 100 renters. In the Midwest, 

the region with the lowest probability of worst case needs among very-low-income renters, 

units and renters almost matched in number, with 97 units per 100 renters. 

In terms of units actually available to extremely-low-income renters because they are either 

vacant for rent or occupied by extremely-low-income renters, the differentials among regions 

are similar, but the deterioration between 1991 and 1997 has been worse (see Exhibit 25). 

Declines in affordable stock relative to extremely-low-income renters were worst in the 

South, where the ratio of units per 100 renters dropped from 54 to 38, and the Northeast, 

which experienced a drop from 49 to 37 units per 100 renters. Affordable units were most 

often available in the Midwest, but even there the situation worsened during the 1990s and 

43
there were only 43 units per 100 renters by 1997. Affordable units were least often available 

in the West: by 1997 there were only 27 affordable units for every 100 extremely-low- Units available and affordable per 100

income renters needing them. extremely-low-income renter households 

Exhibit 25

Mismatches Between Extremely-Low-Income Renters and

Available Rental Units They Can Afford Are Greatest in the West, But Worsening

Everywhere

60 

50 

40 

30 

20 Northeast 

Midwest 

10 South 

West 

0 

1991 1993 1995 1997 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys; Table A–14 

Among units affordable to incomes at 50 percent of median, regional data show that the 

slight but encouraging national rise observed between 1995 and 1997 occurred in all four 

regions. The rise was greatest in the Midwest, the one region with a large and growing 

surplus of such units during the 1990s. The improvement was least in the West, the only 

region with a substantial shortage of units affordable to very-low-income renters and one in 

which that shortage worsened during the 1990s. 

The increased availability of units affordable to incomes at 50 percent of area median stands 

out most clearly when the number of these affordable units that are vacant is compared to the 

number of very-low-income renters with worst case needs who need other housing. As the 

1996 report discussed,26 this ratio indicates whether there are enough vacant units with rents 

near or below the FMR for households who could not use Section 8 vouchers in their current 

housing because it is inadequate or too small for their family. Instead, they would need to 

move to other housing if they were to receive and use tenant-based assistance. As Exhibit 26 

details, this indicator of housing availability is highest in the Midwest and South and lowest 

26 See pp. 44–45 of Rental Housing Assistance at a Crossroads. 

44
in the West. Between 1991 and 1997, it increased in all four regions, with substantial gains in 

both the Midwest and the South. 

Exhibit 26

For Families Who Need to Move, Using Tenant-Based Assistance Became Easier

in Each Region Between 1991 and 1997

152 

94 

267 256 

49 

283 

118 

557 

453 

112 

0 

100 

200 

300 

400 

500 

600 

U.S. Northeast Midwest South W est 

Vacant very-low-rent units per 100 

worst case needing other housing 

1991 1997 

Source: HUD-PD&R tabulations from the 1991 and 1997 American Housing Surveys; Table A–14 

•	 Very-low-income renters were least likely to receive some form of housing assistance in 

the South (where 21 percent reported some form of assistance) and in the West (with 23 

percent assisted). In the Northeast and Midwest regions, over 30 percent of very-lowincome renters reported assistance. 

Lacking units affordable to them, the extremely-low-income renters who are most likely to 

have worst case problems need rental assistance to afford what units exist. In a somewhat 

surprising change from previous experience, the South in 1997 showed the lowest rates of 

assistance: only 21 percent of very-low-income renters. Because of the major change in 

assistance questions and the markedly higher rates of assistance earlier reported in the South, 

this shift must be regarded with some skepticism. The West, which over the past two decades 

has consistently had the lowest percent assisted of the four regions, is now second lowest, 

with 23 percent assisted. Rates of assistance remained highest in the Northeast, where 34 

percent of very-low-income renters reported assistance, and in the Midwest (31 percent). 

45
Finding 9: When both very-low-income renters with some form of housing 

assistance and those without assistance are considered, the 

number of very-low-income renters with severe rent burdens rose 

by 500,000 families between 1995 and 1997. 

•	 In 1997, 6.4 million very-low-income renters had a severe rent burden. This number 

increased from 5.9 million in 1995. Because this measured increase of 8 percent is not 

complicated by the 1997 change in AHS housing assistance questions, it implies strongly 

that worst case needs actually rose by more than 4 percent between 1995 and 1997. 

As mentioned above under Finding 1, one of the most disturbing results found for this report 

is the sharp rise observed in severe rent burdens among all very-low-income renters, 

including both those with no assistance and those reporting some type of rental assistance. 

(Because of the major changes in the AHS assistance questions between 1995 and 1997, 

comparing estimates of all renters that do not rely on answers to the assistance questions in 

either year is likely to provide a more accurate portrait of change over time than is possible 

from the efforts reported above to make the 1995 counts of unassisted households as 

comparable as possible to the 1997 estimates.) The number of all very-low-income renters 

who pay more than half of their incomes for rent rose by 500,000 between 1995 and 1997 to 

reach an all-time high of 6.4 million. This 2-year increase of 500,000 among very-lowincome renters in the housing problem that forms the main component of worst case needs 

suggests strongly that the estimated increase of 205,000 in worst case needs discussed in 

Finding 1 is an underestimate. It is similarly disquieting to note that between 1991 and 1997, 

the number of very-low-income renters who paid more than half of income for rent rose by 

almost 1.2 million, double the measured increase of 580,000 in worst case needs over that 6-

year period. 

46
Exhibit 27

Between 1995 and 1997, There Was an Alarming Rise in the Number of Very-LowIncome Renters Paying More Than Half of Their Income for Rent

0 

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

7,000 

1991 1993 1995 1997 

Very-low-income renters (in thousands) 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

•	 The 6.4 million very-low-income renters with a severe rent burden in 1997 include many 

families who report receiving some form of housing assistance. 

Because the AHS assistance questions were changed in 1997 to provide more accurate 

estimates of the number and characteristics of renters already aided by a Federal, State, or 

local housing program, the fact that the 6.4 million very-low-income renters with severe rent 

burdens in 1997 include 1.3 million renters who apparently were assisted by some form of 

government program is also troubling. Rent/income ratios above the 30 percent of adjusted 

incomes required in public housing and privately owned, subsidized projects have been 

observed before in AHS data.27 Extensive investigation suggests that the basic problem 

appears to be response error in the survey. However, rent/income ratios above 30 percent are 

possible in the voucher program, in privately-owned projects that do not receive deep 

subsidies, and in units subsidized through programs (such as the LIHTC) that have fixed 

rents (see Exhibit 4). Because severe rent burdens above 50 percent of income raise basic 

questions about the effectiveness of assistance programs in solving housing problems, the 

extent to which renters in subsidized programs experience excessive rent burdens will 

continue to be studied and monitored closely. 

27 See pp. 17–20 of Characteristics of HUD-Assisted Renters and Their Units in 1993. 

47
48
Chapter 3 

Policy Implications 

The findings contained in this report have important implications that policymakers at all 

levels—Federal, State, and local—should consider in determining housing policy and 

administering programs. These findings demonstrate that the housing affordability problems 

facing American families, particularly those at the lower end of the income scale, have not 

been alleviated by this extended period of overall economic expansion. Instead, the 

affordability crisis is worsening for these at-risk families. The number of families with worst 

case needs for housing assistance continues to grow. 

A wide variety of market forces and other factors have contributed to this crisis of housing 

affordability through the 1990s. Among these forces are continued suburbanization of 

population and employment, regulatory barriers to development of multifamily housing, 

underinvestment in affordable housing by local communities, continuing discriminatory 

barriers, and the simple economics of supply and demand in which rising incomes for higher 

income families drive up rents faster than the poorest families can afford. The continuing 

loss of rental units affordable to the poorest families, especially the faster losses in suburban 

areas, is particularly disturbing. 

In part, the growth in the crisis during the 1990s can also be attributed to the elimination of 

Federal appropriations for additional rental vouchers between 1995 and 1998. In the past, 

Congress has responded to findings of serious housing affordability problems by providing 

for new rental assistance. In particular, during the economic expansion of the 1980s, the 

number of families with worst case needs dropped significantly between 1985 and 1987 as 

incremental rental assistance grew by 80,000 to 100,000 families each year. In addition, 

during the same period new housing developments were becoming available for occupancy 

by the poorest households as the result of production programs that had been funded in 

earlier years.

28 In fact, from 1977 to 1994, the number of HUD-assisted households grew by 

2.6 million—an average of 204,000 additional households each year from 1977 to 1983 and 

an increase of 107,000 per year from 1984 to 1994. Exhibit 27 shows recent trends in Federal 

appropriations for new units of deeply targeted rental housing assistance, including housing 

for the elderly and disabled under Sections 202 and 811. After the 4-year hiatus in funding 

for vouchers between 1995 and 1998, Congress resumed the fight against worst case needs 

by appropriating 50,000 vouchers for fiscal year 1999 and 60,000 vouchers for fiscal year 

2000. 

28 See Finding 1 of the 1998 report to Congress, Rental Housing Assistance—The Crisis Continues, pp. 

9–11. 

49
Exhibit 28 

New Units of Federal Rental Assistance 

Have Been Minimal in Recent Years 

Source: HUD Office of Budget 

0 

50,000 

100,000 

150,000 

200,000 

250,000 

300,000 

350,000 

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 

Fiscal year 

Units of rental assistance enacted 

All units 

202/811 

units 

An effective response to this crisis must combine a number of approaches to overcome 

different aspects of these problems. Further expansion of the Section 8 voucher program 

must be an essential component of the Federal response to this growing crisis. The 

President’s Budget for Fiscal Year 2001, which includes funding for 120,000 incremental 

Section 8 vouchers, is a bold step forward to overcome this affordable housing crisis and 

begin to reduce the number of families suffering worst case housing problems. While the 

Section 8 tenant-based program is not a panacea for all of the varied housing affordability 

problems of the Nation, it is particularly well-designed to meeting the vast majority of 

problems identified as worst case needs. Section 8 vouchers help low-income families by 

paying the difference between 30 percent of the family’s income and the HUD-established 

local fair market rent for an appropriately sized unit. The renewed modest growth in rental 

housing units that are affordable to households with incomes up to 50 percent of median 

income shown in this report suggests improved availability of decent housing that would be 

affordable to extremely-low-income households if they received Section 8 assistance. 

Moreover, as this report shows, severe rent burden is the only housing problem facing 77 

percent of all families with worst case needs. Since these families already live in adequate 

and uncrowded housing, Section 8 assistance by itself could alleviate the excessive rent 

burdens facing these families, with no need for additional housing units to increase the 

supply of affordable housing. By providing 120,000 vouchers per year, it should be possible 

50
within less than 28 years to serve all of the worst case households that have only a severe rent 

burden and are actually likely to use vouchers.29 

The Section 8 program continues to be particularly well-targeted to the extremely-lowincome families who most often have worst case needs. Under the Quality Housing and 

Work Responsibility Act, at least 75 percent of all vouchers that become available in any 

given year (either through new appropriations or through “turnover” of existing vouchers) 

must be provided to extremely-low-income families. 

In particular, the fact that working families are more and more likely to have worst case 

needs highlights the importance of continuing to utilize Section 8 vouchers to enhance and 

support State and local welfare-to-work efforts. Typically, housing represents the number 

one cost burden for families making the transition to self-sufficiency. Because vouchers can 

be used in any location, they are well suited to assist families seeking better jobs to find and 

afford housing near their place of work. By providing 32,000 Section 8 vouchers for use in 

conjunction with local welfare-to-work efforts, the President’s FY2001 Budget will help 

families find permanent employment and locate decent, affordable housing. 

Although families and individuals without homes are unfortunately not counted by the AHS 

and are therefore not included in these estimates of worst case needs, the homeless in a very 

real sense have the most pressing worst case needs. For this reason, the President’s FY2001 

Budget provides a $180-million increase in funding for HUD’s homelessness assistance 

program, including $105 million that will provide 18,000 homeless families with Section 8 

vouchers to allow them access to affordable permanent housing. 

Other tools are needed as well to effectively reduce the pressures on housing markets that 

exacerbate worst case housing needs. The continuing erosion of the affordable housing 

supply must be countered with more affordable housing production. FHA Multifamily 

Insurance, including the FHA Risk Sharing program, which draws on the capacity of the 

State Housing Finance Agencies, is an important source of financing for the production of 

affordable rental housing. And programs such as light rehabilitation can help families living 

in severely inadequate housing or facing multiple problems. 

29 Assuming that use of vouchers would be similar to participation rates of eligible households in the food 

stamps program, some 80 percent of worst case households, or 3.4 million of the worst case households 

with only a severe rent burden, are likely to seek and use vouchers. At 120,000 new vouchers per year, it 

would take 28 years to serve this number of households. If incremental assistance were 340,000 new 

vouchers per year (the peak level for all types of incremental rental assistance achieved in 1979), it would 

take 10 years. Both of these estimates are overly simplistic in assuming that there is no underlying change in 

worst case needs because of demographic and economic trends, that none of the approximately 500,000 

assisted units that turn over each year are used for previously unassisted households with worst case needs, 

and that the newly appropriated vouchers only go to renters with worst case needs. More accurate 

projections should consider expected changes in underlying demand; transitory changes in needs related to 

changing incomes, rents, or household composition; the degree to which turnover in already assisted units 

can aid in meeting worst case needs; and the share of newly available units targeted to households with 

worst case needs. Therefore, HUD research is underway to better identify likely values for these key 

parameters. 

51
Indeed, available evidence regarding the LIHTC suggests that the recent rise in units 

affordable to families below 50 percent of median income may in part result from this 

important program. Not coincidentally, this program most effectively serves extremely-lowincome families when it is combined with rental assistance such as Section 8 tenant-based 

vouchers. The President’s FY2001 Budget recognizes this reality by providing 10,000 

incremental Section 8 vouchers specifically targeted for use in conjunction with the LIHTC 

and FHA Multifamily Insurance. The HOME program is also a vital tool for effective local 

responses to the worst case needs crisis. Designed as a flexible block grant program capable 

of meeting local needs, the HOME program can address worst case needs in a variety of 

ways. HOME funding can be used to rehabilitate inadequate housing occupied by worst case 

needs families, to expand supplies of affordable rental housing, to provide tenant-based 

rental assistance, and to provide homeownership assistance for low-income working families. 

Public housing operating and capital subsidies and the HOPE VI program help to preserve 

good quality existing housing and to tear down distressed public housing and revitalize 

neighborhoods. HUD’s homeless assistance programs and the Housing for People With 

AIDS (HOPWA) program provide badly needed support for vulnerable populations. The 

Section 202 Supportive Housing for the Elderly and the Section 811 Supportive Housing for 

Persons With Disabilities Programs are also important vehicles for providing affordable 

housing and supportive services for these needy groups. 

Last, the Federal response to the housing affordability crisis must also include effective 

programs to maximize investment in distressed areas to provide economic opportunities for 

struggling American families. In this regard, core HUD programs such as Community 

Development Block Grants (CDBG), the Section 108 Loan Guarantee Program, and the 

Economic Development Initiative will play a strong role. In addition, new economic 

development resources available to HUD, including funding for a second round of 

Empowerment Zones and for the America’s Private Investment Companies (APIC) initiative, 

will help reinvigorate communities and provide new job opportunities where they are needed 

most. 

Federal housing programs must be supported and complemented by continued State and local 

efforts if the attempt to reduce worst case needs is to be successful. Such efforts should 

include careful consideration of worst case needs and local market conditions in the 

consolidated planning process and recognition of pressing needs for affordable housing by 

State tax credit allocation agencies. State and local agencies responsible for administering 

the CDBG and HOME block grant programs can address worst case needs by appropriately 

targeting assistance to needy families and to specific needs within their local jurisdictions 

(such as local shortages of apartments suitable for families with children, the elderly or the 

disabled) or pressing needs for rehabilitating inadequate housing. In deciding among 

competing demands, State and local agencies administering the CDBG and HOME programs 

should seriously consider the relative needs for rental assistance and affordable rental 

housing in their jurisdictions. Local public housing authorities can aid these efforts by 

developing appropriate local admission preferences and by setting the Section 8 payment 

standard at levels that allow effective use of vouchers in local rental markets. 

52
Finally, additional resources to further address the affordable housing crisis may be available 

from surplus funds generated by the improved performance of the Federal Housing 

Administration and its Mutual Mortgage Insurance (MMI) Fund. In FY99 the FHA MMI 

Fund had a surplus of $16 billion—more than $5 billion above the total value reported for 

FY98. These surplus funds can be an important source of additional funds to enhance HUD’s 

affordable housing efforts. In fact, on March 7, 2000, President Clinton directed HUD and 

OMB to prepare recommendations for how best to use newly available funds to further 

strengthen Federal housing programs and enhance comprehensive affordable housing 

opportunities. HUD will develop recommendations for the use of these funds to further 

strengthen Federal housing programs and enhance comprehensive affordable housing 

opportunities. 

America is currently experiencing a period of unprecedented prosperity and economic 

expansion. Building on the success of the President’s historic 1993 budget, and through the 

bipartisan efforts of the Administration and Congress working together, the Federal 

Government is experiencing a budget surplus for the first time in 30 years. However, too 

many Americans have not shared in these triumphs of American productivity and fiscal 

prudence. A bold expansion in Federal assistance for affordable housing is needed to help 

fulfill the Nation’s commitment to its neediest citizens for a decent and affordable home in a 

suitable living environment. 

53
54
Appendix A

Data on Housing Problems and Supplies of Affordable Housing

Table A–1 Housing Conditions of U.S. Renters and Owners, 1997, by Relative Income 

Table A–2 Housing Conditions of All Renters and Owners, 1991, 1993, 1995, and 1997 

Table A–3 Income Distribution and Ownership Rates of All Households With and 

Without Children, 1978, 1991, and 1997 

Table A–4 Housing Problems of Very-Low-Income Renters by Household Type, 1991, 

1993, 1995, and 1997 

Table A–5 Housing Problems and Characteristics of Very-Low-Income Renters by 

Household Type, 1997 

Table A–6 Housing Problems and Characteristics of Worst Case Renters by Household 

Type, 1997 

Table A–7 Detailed Housing Problems of Worst Case Renters by Household Type, 1997 

Table A–8 Housing Problems Among Very-Low-Income Renters by Race and Ethnicity, 

1991, 1993, 1995, and 1997 

Table A–9 Housing Problems Among Very-Low-Income Renters by Region, 1991, 

1993, 1995, and 1997 

Table A–10 Housing Problems Among Very-Low-Income Renters by Metropolitan 

Location, 1991, 1993, 1995, and 1997 

Table A–11 Assistance and Worst Case Needs Among Very-Low-Income Renters by 

Region and Location, 1997 

Table A–12 Housing Problems, Characteristics, and Earnings of Non-Elderly Renters by 

Relative Income and Household Type, 1997 

Table A–13 Assisted Renters and Percent with Wages as Primary Source of Income, by 

Household Type and Relative Income, 1999 

Table A–14 Measures of Housing Mismatch: Numbers of Affordable Units Per 100 

Renters with Incomes Below 30 Percent or 50 Percent of Area Median 

Income by Region, 1991, 1993, 1995, and 1997 

A–1
Table A–1 

Housing Conditions of U.S. Renters and Owners, 1997, by Relative Income 

Household Income as % of HUD-Adjusted Area Median Family Income 

All 

(0–50%) (51–80%) (81–120%) (121%+) Incomes 

Number of Renter

Households With (Thousands): 14,519 6,330 6,353 6,797 34,000

Rent Burden >50% of Income 6,395 222 33 36 6,686 

Rent Burden 31–50% of Income 4,124 1,955 529 171 6,778 

Severely Inadequate Housing 613 188 137 133 1,072 

Moderately Inadequate Housing 1,591 518 434 479 3,021 

Crowded Housing 1,153 399 206 133 1,891 

Multiple Problems* 2,171 289 67 57 2,585 

No Problems 3,021 3,345 5,080 5,903 17,350 

Assisted 4,077 636 430 465 5,608 

Priority Problems** 5,379 377 157 152 6,065 

Other Problems*** 3,407 2,379 1,036 670 7,493 

Unassisted, No Problems 1,656 2,938 4,731 5,511 14,835 

Number of Owners 

Households with (Thousands): 12,263 8,893 12,117 32,213 65,486 

Cost Burden 50% of Income 4,310 720 300 207 5,537 

Cost Burden 31–50% of Income 2,783 1,910 1,882 1,762 8,337 

Severely Inadequate Housing 269 101 126 228 725 

Moderately Inadequate Housing 645 395 422 708 2,170 

Crowded Housing 250 239 191 237 916 

Multiple Problems 579 195 141 110 1,025 

No Problems 4,606 5,729 9,339 29,182 48,855 

Priority Problems 4,503 818 426 436 6,182 

Other Problems 3,155 2,347 2,352 2,596 10,449 

Percent of Renter Households With: 

Rent Burden >50% of Income 44% 4% 1% 1% 20% 

Rent Burden 31–50% of Income 28% 31% 8% 3% 20% 

Severely Inadequate Housing 4% 3% 2% 2% 3% 

Moderately Inadequate Housing 11% 8% 7% 7% 9% 

Crowded Housing 8% 6% 3% 2% 6% 

Multiple Problems 15% 5% 1% 1% 8% 

No Problems 21% 53% 80% 87% 51% 

Assisted 28% 10% 7% 7% 16% 

Priority Problems 37% 6% 2% 2% 18% 

Other Problems 23% 38% 16% 10% 22% 

Unassisted, No Problems 11% 46% 74% 81% 44% 

Percent of Owner Households With: 

Cost Burden >50% of Income 35% 8% 2% 1% 8% 

Cost Burden 31–50% of Income 23% 21% 16% 5% 13% 

Severely Inadequate Housing 2% 1% 1% 1% 1% 

Moderately Inadequate Housing 5% 4% 3% 2% 3% 

Crowded Housing 2% 3% 2% 1% 1% 

Multiple Problems 5% 2% 1% 0% 2% 

No Problems 38% 64% 77% 91% 75% 

Priority Problems 37% 9% 4% 1% 9% 

Other Problems 26% 26% 19% 8% 16% 

* Two or three of the following: rent burden >30 percent, severe or moderate physical problems, and overcrowding. 

** Housing costs >50 percent of income or severely inadequate housing among unassisted households. 

*** Rent burden 31–50 percent of income, moderate physical problems, or overcrowding, but no priority problems 

among unassisted households. 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–2
Table A–2 

Housing Conditions of All Renters and Owners, 1991, 1993, 1995, and 1997 

1991 1993 1995 1997 

Number of Renter 

Households With (Thousands): 33,351 33,472 34,150 34,000 

Rent Burden >50% of Income 5,426 5,947 6,187 6,686 

Rent Burden 31–50% of Income 6,938 7,157 7,385 6,778 

Severely Inadequate Housing* 1,347 909 849 1,072 

Moderately Inadequate Housing* 2,375 2,254 2,277 3,021 

Crowded 1,644 1,503 1,673 1,891 

Priority Problems 5,531 5,671 5,737 6,065 

Other Problems 7,332 7,287 7,637 7,493 

No Problems 15,687 15,489 15,546 14,835 

Assisted** 4,801 5,025 5,230 5,608 

Number of Owner 

Households With (Thousands): 59,796 61,251 63,544 65,487 

Cost Burden >50% of Income 3,432 3,778 4,913 5,537 

Cost Burden 31–50% of Income 7,171 7,176 8,053 8,337 

Severely Inadequate Housing 1,527 992 1,173 725 

Moderately Inadequate Housing 2,156 1,971 2,071 2,170 

Crowded 883 883 881 916 

Priority Problems 4,838 4,678 5,957 6,182 

Other Problems 9,268 9,112 10,042 10,449 

No Problems 45,690 47,461 47,545 48,855 

Percent of Renter Households With: 

Rent Burden >50% of Income 16.3% 17.8% 18.1% 19.7% 

Rent Burden 31–50% of Income 20.8% 21.4% 21.6% 19.9% 

Severely Inadequate 4.0% 2.7% 2.5% 3.2% 

Moderately Inadequate 7.1% 6.7% 6.7% 8.9% 

Crowded 4.9% 4.5% 4.9% 5.6% 

Priority Problems 16.6% 16.9% 16.8% 17.8% 

Other Problems 22.0% 21.8% 22.4% 22.0% 

No Problems 47.0% 46.3% 45.5% 43.6% 

Assisted 14.4% 15.0% 15.3% 16.5% 

Percent of Owner Households With: 

Cost Burden >50% of Income 5.7% 6.2% 7.7% 8.5% 

Cost Burden 31–50% of Income 12.0% 11.7% 12.7% 12.7% 

Severely Inadequate Housing 2.6% 1.6% 1.8% 1.1% 

Moderately Inadequate Housing 3.6% 3.2% 3.3% 3.3% 

Crowded 1.5% 1.4% 1.4% 1.4% 

Priority Problems 8.1% 7.6% 9.4% 9.4% 

Other Problems 15.5% 14.9% 15.8% 16.0% 

No Problems 76.4% 77.5% 74.8% 74.6% 

* Questions about inadequate housing changed between 1995 and 1997. 

** So that data from earlier years are more comparable to the 1997 definition, includes households 

reporting State or local assistance. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–3
Table A–3

Income Distribution and Ownership Rates of All Households

With and Without Children, 1978, 1991, and 1997

Household Income as Percent of 

HUD-Adjusted Area Median Income 

0–50% 51–80% 81–120% 121%+ Total 

Income Distribution 

Households (Thousands) 

With Children, 1978 6,651 6,765 8,525 10,325 32,266 

% Distribution 21% 21% 26% 32% 100% 

Without Children, 1978 13,557 8,403 9,039 14,124 45,123 

% Distribution 30% 19% 20% 31% 100% 

With Children, 1991 8,827 6,227 7,820 11,711 34,585 

% Distribution 26% 18% 23% 34% 100% 

Without Children, 1991 16,600 10,223 12,214 19,524 58,561 

% Distribution 28% 17% 21% 33% 100% 

With Children, 1997 8,887 5,702 7,218 15,186 36,993 

% Distribution 24% 15% 20% 41% 100% 

Without Children, 1997 17,895 9,522 11,251 23,824 62,492 

% Distribution 29% 15% 18% 38% 100% 

Owner Households (Thousands) 

With Children, 1978 2,487 4,260 6,631 9,222 22,600 

Ownership Rate 37% 63% 78% 89% 70% 

Without Children, 1978 7,038 4,821 5,402 10,608 27,869 

Ownership Rate 52% 57% 60% 75% 62% 

With Children, 1991 2,693 3,404 5,565 10,282 21,944 

Ownership Rate 31% 55% 71% 88% 63% 

Without Children, 1991 8,717 6,219 7,552 15,361 37,849 

Ownership Rate 53% 61% 62% 79% 65% 

With Children, 1997 2,692 3,150 5,123 13,299 24,264 

Ownership Rate 30% 55% 71% 88% 66% 

Without Children, 1997 9,571 5,743 6,994 18,914 41,222 

Ownership Rate 53% 60% 62% 79% 66% 

Source: HUD-PD&R tabulations from the 1978, 1991, and 1997 American Housing Surveys 

A–4
Table A–4

Housing Problems of Very-Low-Income Renters by Household Type,

1991, 1993, 1995, and 1997 

Number of Households 

(Thousands) As Percent of Households Change 

1991 1993 1995 1997 1991 1993 1995 1997 1991–97 

Elderly 3,574 3,631 3,341 3,294 -8% 

Priority Problems 1,103 1,142 1,051 1,189 31% 31% 31% 36% 8% 

Severe Physical Problems 128 95 67 88 4% 3% 2% 3% -32% 

Rent Burden >50% 1,015 1,085 1,000 1,129 28% 30% 30% 34% 11% 

Rent Burden Only 922 989 936 1,011 26% 27% 28% 31% 10% 

Other Problems 675 665 511 525 19% 18% 15% 16% -22% 

Moderate Physical Problems 155 132 109 113 4% 4% 3% 3% -27% 

Rent Burden 31–50% 599 588 455 465 17% 16% 14% 14% -22% 

Crowded 0 0 0 0 0% 0% 0% 0% 0 

No Problems 461 476 448 428 13% 13% 13% 13% -7% 

Assisted* 1,334 1,348 1,331 1,160 37% 37% 40% 35% -13% 

Families With Children 6,134 6,648 6,502 6,195 1% 

Priority Problems 1,929 2,174 2,005 2,050 31% 33% 31% 33% 6% 

Severe Physical Problems 189 164 127 174 3% 2% 2% 3% -8% 

Rent Burden >50% 1,822 2,083 1,923 1,920 30% 31% 30% 31% 5% 

Rent Burden Only 1,239 1,525 1,411 1,431 20% 23% 22% 23% 16% 

Other Problems 1,616 1,667 1,700 1,715 26% 25% 26% 28% 6% 

Moderate Physical Problems 269 266 260 310 4% 4% 4% 5% 15% 

Rent Burden 31–50% 1,296 1,384 1,397 1,433 21% 21% 21% 23% 11% 

Crowded 432 437 527 499 7% 7% 8% 8% 16% 

No Problems 635 622 646 619 10% 9% 10% 10% -2% 

Assisted* 1,954 2,185 2,151 1,875 32% 33% 33% 30% -4% 

Non-elderly Disabled** 537 476 559 660 23% 

Priority Problems 208 153 214 224 39% 32% 38% 34% 8% 

Severe Physical Problems 56 32 32 16 10% 7% 6% 2% -72% 

Rent Burden >50% 186 138 197 214 35% 29% 35% 32% 15% 

Rent Burden Only 136 110 154 158 25% 23% 27% 24% 16% 

Other Problems 54 40 56 78 10% 8% 10% 12% 45% 

Moderate Physical Problems 24 14 10 20 5% 3% 2% 3% -17% 

Rent burden 31–50% 44 35 50 71 8% 7% 9% 11% 60% 

Crowded 0 0 0 4 0% 0% 0% 1% 0 

No Problems 14 36 35 46 3% 8% 6% 7% 225% 

Assisted 261 247 253 320 49% 52% 45% 48% 23% 

Other Households 3,769 3,993 4,160 4,431 18% 

Priority Problems 1,555 1,728 1,903 1,917 41% 43% 46% 43% 23% 

Severe Physical Problems 209 162 146 202 6% 4% 4% 5% -3% 

Rent Burden >50% 1,432 1,597 1,807 1,802 38% 40% 43% 41% 26% 

Rent Burden Only 1,241 1,431 1,599 1,557 33% 36% 38% 35% 25% 

Other Problems 1,131 1,204 1,128 1,088 30% 30% 27% 25% -4% 

Moderate Physical Problems 198 184 198 272 5% 5% 5% 6% 38% 

Rent burden 31–50% 1,034 1,114 1,040 906 27% 28% 25% 20% -12% 

Crowded 11 28 25 41 0% 1% 1% 1% 262% 

No Problems 693 584 587 558 18% 15% 14% 13% -19% 

Assisted 391 477 541 723 10% 12% 13% 16% 85% 

* Includes households reporting State or local assistance. 

** Nonfamily reporting SSI, which is the only proxy for persons with disabilities in the AHS. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–5
Table A–5

Housing Problems and Characteristics of Very-Low-Income Renters

by Household Type, 1997 

Total* 

Elderly, 

No 

Children 

Families 

With 

Children 

Other 

Families 

Nonfamily 

Reporting 

SSI Income** 

Other 

Nonfamily 

Total Households (Thousands) 14,519 3,294 6,195 997 600 3,434 

Number of Children 13,103 0 13,103 0 0 0 

Number of Persons 34,708 4,193 23,267 2,300 679 4,270 

Children/Household 0.90 0 2.12 0 0 0 

Persons/Household 2.39 1.27 3.76 2.31 1.13 1.24 

Number of Households With: 

Priority Problems 5,379 1,189 2,050 425 203 1,513 

Severe Physical Problems 479 88 174 26 14 176 

Rent Burden >50% of Income 5,066 1,129 1,922 408 194 1,412 

Rent Burden Only 4,156 1,011 1,428 353 143 1,221 

Multiple Problems 1,064 137 573 67 57 229 

Other Problems 3,407 525 1,715 221 71 875 

Moderate Physical Problems 716 113 309 47 18 227 

Rent Burden 31–50% of Income 2,876 465 1,434 183 64 730 

Rent Burden Only 2,249 412 983 156 53 645 

Crowded 544 0 499 17 3 25 

Multiple Problems 660 54 465 26 11 103 

Unassisted, No Problems 1,656 420 555 142 35 504 

In Assisted Housing 4,077 1,160 1,875 209 291 542 

One Person in Household 5,882 2,558 77 0 527 2,721 

Female Head 7,826 2,133 3,512 318 321 1,542 

Minority Head 7,157 974 4,084 502 284 1,313 

AFDC/SSI Income 3,305 550 1,998 157 600 0 

Social Security Income 3,851 2,907 387 144 170 243 

Income Below Poverty 8,596 1,661 4,100 586 503 1,746 

Income <150% of Poverty 12,520 2,687 5,716 828 581 2,708 

Income <30% Median 8,875 2,197 3,682 549 525 1,921 

High School Graduate 9,257 1,587 3,769 700 328 2,872 

Earnings at Minimum Wage: 

At Least Half Time 6,921 317 3,808 665 73 2,058 

At Least Full Time 5,338 169 3,132 512 24 1,502 

Earnings Main Source of Income 7,618 285 4,056 737 64 2,476 

Housing Rated Poor*** 1,501 212 737 88 62 401 

Housing Rated Good 9,926 2,629 3,969 700 398 2,231 

Neighborhood Rated Poor*** 1,583 185 919 94 71 315 

In Central Cities 7,483 1,521 3,242 448 344 1,927 

South 4,483 885 1,992 345 147 1,114 

West 3,753 703 1,834 266 153 796 

A–6
Table A–5 (continued) 

Total* 

Elderly, 

No 

Children 

Families 

With 

Children 

Other 

Families 

Nonfamily 

Reporting 

SSI Income** 

Other 

Nonfamily 

Percentage of Households With: 

Priority Problems 37% 36% 33% 43% 34% 44% 

Severe Physical Problems 3% 3% 3% 3% 2% 5% 

Rent Burden >50% of Income 35% 34% 31% 41% 32% 41% 

Rent Burden Only 29% 31% 23% 35% 24% 36% 

Multiple Problems 7% 4% 9% 7% 10% 7% 

Other Problems 23% 16% 28% 22% 12% 25% 

Moderate Physical Problems 5% 3% 5% 5% 3% 7% 

Rent Burden 31–50% of Income 20% 14% 23% 18% 11% 21% 

Rent Burden Only 15% 12% 16% 16% 9% 19% 

Crowded 4% 0% 8% 2% 1% 1% 

Multiple Problems 5% 2% 8% 3% 2% 3% 

Unassisted, No Problems 11% 13% 9% 14% 6% 15% 

In Assisted Housing 28% 35% 30% 21% 48% 16% 

One Person in Household 41% 78% 1% 0% 88% 79% 

Female Head 54% 65% 57% 32% 53% 45% 

Minority Head 49% 30% 66% 50% 47% 38% 

AFDC/SSI Income 23% 17% 32% 16% 100% 0% 

Social Security Income 27% 88% 6% 14% 28% 7% 

Income Below Poverty 59% 50% 66% 59% 84% 51% 

Income <150% of Poverty 86% 82% 92% 83% 97% 79% 

Income <30% Median 61% 67% 59% 55% 88% 56% 

High School Graduate 64% 48% 61% 70% 55% 84% 

Earnings at Minimum Wage: 

At Least Half Time 48% 10% 61% 67% 12% 60% 

At Least Full Time 37% 5% 51% 51% 4% 44% 

Earnings Main Source of Income 52% 9% 65% 74% 11% 72% 

Housing Rated Poor 10% 6% 12% 9% 10% 12% 

Housing Rated Good 68% 80% 64% 70% 66% 65% 

Neighborhood Rated Poor 11% 6% 15% 9% 12% 9% 

In Central Cities 52% 46% 52% 45% 57% 56% 

South 31% 27% 32% 35% 24% 32% 

West 26% 21% 30% 27% 25% 23% 

* May not add up due to rounding. 

** AHS proxy for households with persons with disabilities. 

*** Respondent rates housing or neighborhood quality 1–4 on scale of 1–10. 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–7
Table A–6

Housing Problems and Characteristics of Worst Case Renters

by Household Type, 1997 

Total 

Elderly, 

No 

Children 

Families 

With 

Children 

Other 

Families 

Nonfamily 

Reporting 

SSI Income 

Other 

NonFamily 

Households With Priority Problems 

(Thousands) 

5,379 1,189 2,050 425 203 1,513 

Number of Children 4,315 0 4,315 0 0 0 

Number of Persons 12,281 1,549 7,613 961 220 1,939 

Children/Household .80 .00 2.11 .00 .00 .00 

Persons/Household 2.28 1.30 3.71 2.26 1.08 1.28 

Number of Households With: 

Severe Physical Problems 479 88 174 26 14 176 

Rent Burden >50% of Income 5,066 1,129 1,922 408 194 1,412 

Rent Burden Only 4,156 1,011 1,428 353 143 1,221 

Multiple Problems 1,064 137 573 67 57 229 

Crowded Housing 410 3 365 3 8 32 

One Person in Household 2,248 885 0 0 187 1,146 

Female Head, No Husband 2,923 740 1,221 141 84 737 

Minority Head 2,441 303 1,299 196 103 539 

AFDC/SSI Income 1,082 165 659 55 203 0 

Social Security Income 1,376 1,062 118 67 50 80 

Income Below Poverty 3,889 681 1,719 300 193 996 

Income <150% of Poverty 4,965 1,022 1,978 394 203 1,369 

Income <30% Median 4,161 891 1,682 297 191 1,100 

High School Graduate 3,608 674 1,222 311 115 1,286 

Earnings at Minimum Wage: 

At Least Half Time 2,276 95 1,042 284 6 849 

At Least Full Time 1,481 47 763 189 2 479 

Earnings Main Source of Income 2,917 100 1,237 344 16 1,220 

Housing Rated Poor 663 90 281 47 28 218 

Housing Rated Good 3,558 889 1,296 292 117 964 

Neighborhood Rated Poor 549 82 274 31 30 132 

Central City 2,748 550 1,076 151 129 843 

South 1,629 321 592 154 41 520 

West 1,498 301 668 110 55 364 

Percent of Worst Case Households With: 

Severe Physical Problems 9% 7% 9% 6% 7% 12% 

Rent Burden >50% of Income 94% 95% 94% 96% 96% 93% 

Rent Burden Only 77% 85% 70% 83% 71% 81% 

Multiple Problems 20% 11% 28% 16% 28% 15% 

Crowded Housing 8% 0% 18% 1% 4% 2% 

One Person in Household 42% 74% 1% 0% 92% 76% 

Female Head, No Husband 54% 62% 60% 33% 41% 49% 

Minority Head 45% 26% 63% 46% 51% 36% 

AFDC/SSI Income 20% 14% 32% 13% 100% 0% 

Social Security Income 26% 89% 6% 16% 25% 5% 

Income Below Poverty 72% 57% 84% 71% 95% 66% 

Income <150% of Poverty 92% 86% 96% 93% 100% 91% 

Income <30% Median 77% 75% 82% 70% 94% 73% 

High School Graduate 67% 57% 60% 73% 57% 85% 

Earnings at Minimum Wage: 

At Least Half Time 42% 8% 51% 67% 3% 56% 

At Least Full Time 28% 4% 37% 45% 1% 32% 

Earnings Main Source of Income 54% 8% 60% 81% 8% 81% 

A–8
Table A–6 (continued) 

Housing Rated Poor 12% 8% 14% 11% 14% 14% 

Housing Rated Good 66% 75% 63% 69% 58% 64% 

Neighborhood Rated Poor 10% 7% 13% 7% 15% 9% 

Central City 51% 46% 53% 35% 63% 56% 

South 30% 27% 29% 36% 20% 34% 

West 28% 25% 33% 26% 27% 24% 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–9
Table A–7 

Detailed Housing Problems of Worst Case Renters by Household Type, 1997 

Elderly Family Nonfamily Total 

Severe Physical Problems 

Only 42 4% 53 2% 65 4% 159 3% 

And Rent Burden >50% of 

Income 

28 2% 56 2% 81 5% 165 3% 

And Other Problem(s) 18 2% 92 4% 45 3% 154 3% 

Rent Burden >50% of Income 

Only 1,011 85% 1,781 72% 1,365 80% 4,156 77% 

And Moderate Physical 

Problems but Uncrowded 

88 7% 186 8% 153 9% 427 8% 

And Moderate Physical 

Problems and Crowded 

0 0% 49 2% 8 0% 57 1% 

And Crowded but Adequate 3 0% 257 10% 0 0% 260 5% 

Total 1,189 100% 2,474 100% 1,716 100% 5,379 100% 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–10
Table A–8

Housing Problems Among Very-Low-Income Renters by Race and Ethnicity,

1991, 1993, 1995, and 1997 

Number of Households (Thousands) As Percent of Households Change 

1991 1993 1995 1997 1991 1993 1995 1997 1991–97 

Non-Hispanic White 7,908 8,127 7,579 7,362 -7% 

Priority Problems 2,888 2,970 2,835 2,939 37% 37% 37% 40% 2% 

Severe Physical Problems* 329 231 165 200 4% 3% 2% 3% -39% 

Rent Burden >50% of Income 2,690 2,822 2,713 2,809 34% 35% 36% 38% 4% 

Rent Burden Only 2,347 2,528 2,440 2,481 30% 31% 32% 34% 6% 

Other Problems 1,922 2,040 1,752 1,670 24% 25% 23% 23% -13% 

Moderate Physical Problems* 278 243 271 309 4% 3% 4% 4% 11% 

Rent Burden 31–50% of Income 1,729 1,859 1,592 1,472 22% 23% 21% 20% -15% 

Crowded 92 130 97 81 1% 2% 1% 1% -12% 

No Problems 1,248 1,185 1,137 1,009 16% 15% 15% 14% -19% 

Assisted** 1,849 1,933 1,857 1,741 23% 24% 25% 24% -6% 

Non-Hispanic Black 3,525 3,525 3,725 3,676 2% 

Priority Problems 973 1,070 1,107 1,097 28% 29% 30% 31% 13% 

Severe Physical Problems 135 99 107 130 4% 3% 3% 4% -4% 

Rent Burden >50% of Income 886 1,001 1,039 1,014 25% 27% 28% 28% 14% 

Rent Burden Only 622 762 788 764 18% 20% 21% 21% 23% 

Other Problems 775 743 698 711 22% 20% 19% 20% -8% 

Moderate Physical Problems 247 228 155 189 7% 6% 4% 5% -24% 

Rent Burden 31–50% of Income 615 609 605 580 17% 16% 16% 16% -6% 

Crowded 92 80 80 84 3% 2% 2% 2% -9% 

No Problems 305 283 277 301 9% 8% 8% 8% -2% 

Assisted 1,471 1,627 1,594 1,479 42% 44% 43% 41% 1% 

Hispanic Origin 2,010 2,214 2,584 2,723 35% 

Priority Problems 711 872 930 1,033 35% 39% 36% 38% 45% 

Severe Physical Problems 91 100 81 123 5% 5% 3% 5% 35% 

Rent Burden >50% of Income 669 809 887 952 33% 37% 34% 35% 42% 

Rent Burden Only 419 557 638 661 21% 25% 25% 24% 57% 

Other Problems 636 630 776 802 32% 28% 30% 29% 26% 

Moderate Physical Problems 89 100 119 175 4% 5% 5% 6% 97% 

Rent Burden 31–50% of Income 516 505 591 642 26% 23% 23% 24% 24% 

Crowded 228 211 348 323 11% 10% 13% 12% 42% 

No Problems 190 185 240 266 9% 8% 9% 10% 40% 

Assisted 473 527 638 622 24% 24% 25% 23% 31% 

* Questions about inadequate housing changed between 1995 and 1997. 

** Includes households reporting State or local assistance. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–11
Table A–9

Housing Problems Among Very-Low-Income Renters by Region,

1991, 1993, 1995, and 1997 

Number of Households (Thousands) As Percent of Households Change 

1991 1993 1995 1997 1991 1993 1995 1997 1991–97 

Northeast 3,076 3,288 3,319 3,354 9% 

Priority Problems 1,061 1,218 1,232 1,295 34% 37% 37% 39% 22% 

Severe Physical Problems* 168 135 122 153 5% 4% 4% 5% -9% 

Rent Burden >50% of Income 971 1,143 1,155 1,205 32% 35% 35% 36% 24% 

Rent Burden Only 785 925 979 1,007 26% 28% 30% 30% 28% 

Other Problems 571 604 553 570 19% 18% 17% 17% 0% 

Moderate Physical Problems* 83 47 72 96 3% 1% 2% 3% 15% 

Rent Burden 31–50% of Income 520 578 510 495 17% 18% 15% 15% -5% 

Crowded 58 61 42 71 2% 2% 1% 2% 24% 

No Problems 348 308 277 340 11% 9% 8% 10% -2% 

Assisted** 1,097 1,158 1,257 1,150 36% 35% 38% 34% 5% 

Midwest 3,342 3,446 3,014 2,930 -12% 

Priority Problems 956 1,126 973 958 29% 33% 32% 33% 0% 

Severe Physical Problems 124 91 0 98 4% 3% 3% -21% 

Rent Burden >50% of Income 874 1,064 913 896 26% 31% 30% 31% 2% 

Rent Burden Only 733 934 791 759 22% 27% 26% 26% 4% 

Other Problems 847 754 636 659 25% 22% 21% 23% -22% 

Moderate Physical Problems 74 79 80 118 2% 2% 3% 4% 61% 

Rent Burden 31–50% of Income 786 683 567 568 24% 20% 19% 19% -28% 

Crowded 66 75 42 59 2% 2% 1% 2% -11% 

No Problems 522 487 407 413 16% 14% 14% 14% -21% 

Assisted 1,017 1,079 997 900 30% 31% 33% 31% -11% 

South 4,535 4,768 4,534 4,483 -1% 

Priority Problems 1,461 1,491 1,430 1,629 32% 31% 32% 36% 11% 

Severe Physical Problems 174 133 109 144 4% 3% 2% 3% -17% 

Rent Burden >50% of Income 1,350 1,385 1,354 1,527 30% 29% 30% 34% 13% 

Rent Burden Only 1,033 1,155 1,100 1,239 23% 24% 24% 28% 20% 

Other Problems 1,288 1,326 1,194 1,110 28% 28% 26% 25% -14% 

Moderate Physical Problems 376 380 318 313 8% 8% 7% 7% -17% 

Rent Burden 31–50% of Income 997 1,057 985 897 22% 22% 22% 20% -10% 

Crowded 151 132 161 110 3% 3% 4% 2% -27% 

No Problems 605 619 675 585 13% 13% 15% 13% -3% 

Assisted 1,181 1,332 1,200 947 26% 28% 26% 21% -20% 

West 3,060 3,246 3,696 3,753 23% 

Priority Problems 1,318 1,362 1,538 1,498 43% 42% 42% 40% 14% 

Severe Physical Problems 117 94 60 84 4% 3% 2% 2% -28% 

Rent Burden >50% of Income 1,260 1,311 1,505 1,437 41% 40% 41% 38% 14% 

Rent Burden Only 988 1,042 1,229 1,150 32% 32% 33% 31% 16% 

Other Problems 769 891 1,012 1,068 25% 27% 27% 28% 39% 

Moderate Physical Problems 114 92 105 188 4% 3% 3% 5% 65% 

Rent Burden 31–50% of Income 672 803 879 915 22% 25% 24% 24% 36% 

Crowded 169 197 307 305 6% 6% 8% 8% 81% 

No Problems 328 305 356 317 11% 9% 10% 8% -3% 

Assisted 645 689 789 869 21% 21% 21% 23% 35% 

* Questions about inadequate housing changed between 1995 and 1997. 

** Includes households reporting State or local assistance. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–12
Table A–10

Housing Problems Among Very-Low-Income Renters

by Metropolitan Location, 1991, 1993, 1995, and 1997 

Number of Households (Thousands) As Percent of Households Change 

1991 1993 1995 1997 1991 1993 1995 1997 1991–97 

Central Cities 7,164 7,426 7,269 7,483 4% 

Priority Problems 2,442 2,757 2,648 2,749 34% 37% 36% 37% 13% 

Severe Physical Problems* 294 272 199 297 4% 4% 3% 4% 1% 

Rent Burden >50% of Income 2,270 2,589 2,529 2,559 32% 35% 35% 34% 13% 

Rent Burden Only 1,751 2,073 2,061 2,056 24% 28% 28% 27% 17% 

Other Problems 1,768 1,700 1,656 1,781 25% 23% 23% 24% 1% 

Moderate Physical Problems* 320 277 273 405 4% 4% 4% 5% 26% 

Rent Burden 31–50% of Income 1,520 1,500 1,433 1,486 21% 20% 20% 20% -2% 

Crowded 267 238 301 328 4% 3% 4% 4% 23% 

No Problems 762 687 663 748 11% 9% 9% 10% -2% 

Assisted** 2,192 2,282 2,302 2,202 31% 31% 32% 29% 0% 

Suburbs 4,356 4,770 4,860 4,561 5% 

Priority Problems 1,655 1,735 1,820 1,847 38% 36% 37% 41% 12% 

Severe Physical Problems 167 110 98 93 4% 2% 2% 2% -44% 

Rent Burden >50% of Income 1,562 1,663 1,748 1,795 36% 35% 36% 39% 15% 

Rent Burden Only 1,307 1,444 1,501 1,530 30% 30% 31% 34% 17% 

Other Problems 1,150 1,307 1,238 1,030 26% 27% 25% 23% -10% 

Moderate Physical Problems 133 173 154 166 3% 4% 3% 4% 25% 

Rent Burden 31–50% of Income 1,016 1,172 1,094 907 23% 25% 23% 20% -11% 

Crowded 119 186 201 166 3% 4% 4% 4% 40% 

No Problems 594 616 663 528 14% 13% 14% 12% -11% 

Assisted 957 1,112 1,139 1,156 22% 23% 23% 25% 21% 

Nonmetropolitan Areas 2,493 2,553 2,433 2,475 -1% 

Priority Problems 698 704 706 784 28% 28% 29% 32% 12% 

Severe Physical Problems 121 71 75 89 5% 3% 3% 4% -27% 

Rent Burden >50% of Income 624 652 650 711 25% 26% 27% 29% 14% 

Rent Burden Only 482 538 537 571 19% 21% 22% 23% 18% 

Other Problems 557 570 502 596 22% 22% 21% 24% 7% 

Moderate Physical Problems 193 146 149 145 8% 6% 6% 6% -25% 

Rent Burden 31–50% of Income 438 450 415 482 18% 18% 17% 19% 10% 

Crowded 58 41 50 50 2% 2% 2% 2% -13% 

No Problems 447 416 389 376 18% 16% 16% 15% -16% 

Assisted 791 863 837 719 32% 34% 34% 29% -9% 

U.S. Total 14,013 14,749 14,563 14,519 4% 

Priority Problems 4,795 5,196 5,174 5,380 34% 35% 36% 37% 12% 

Severe Physical Problems 583 453 372 479 4% 3% 3% 3% -18% 

Rent Burden >50% of Income 4,456 4,903 4,927 5,066 32% 33% 34% 35% 14% 

Rent Burden Only 3,539 4,055 4,099 4,156 25% 27% 28% 29% 17% 

Other Problems 3,475 3,577 3,396 3,407 25% 24% 23% 23% -2% 

Moderate Physical Problems 646 596 575 716 5% 4% 4% 5% 11% 

Rent Burden 31–50% of Income 2,974 3,122 2,942 2,875 21% 21% 20% 20% -3% 

Crowded 443 465 552 544 3% 3% 4% 4% 23% 

No Problems 1,803 1,718 1,716 1,652 13% 12% 12% 11% -8% 

Assisted 3,940 4,257 4,278 4,078 28% 29% 29% 28% 3% 

* Questions about inadequate housing changed between 1995 and 1997. 

** Includes households reporting State or local assistance. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–13
Table A–11

Assistance and Worst Case Needs Among Very-Low-Income Renters

by Region and Location, 1997 

Very-Low- Percent of Worst Case 

Income Assisted Worst Case With Rent Needing Other 

Renters Thousands Percent Thousands Percent Burden Only Housing* 

Northeast 3,354 1,150 34% 1,295 39% 78% 16% 

Central Cities 2,019 727 36% 758 38% 74% 20% 

Suburbs 1,015 293 29% 435 43% 83% 12% 

Non-Metro 320 129 40% 101 32% 82% 8% 

Midwest 2,930 900 31% 958 33% 79% 14% 

Central Cities 1,430 435 30% 511 36% 73% 17% 

Suburbs 764 236 31% 232 30% 91% 7% 

Non-Metro 737 229 31% 216 29% 81% 13% 

South 4,483 1,158 26% 1,629 36% 76% 14% 

Central Cities 2,126 574 27% 721 34% 75% 15% 

Suburbs 1,409 334 24% 583 41% 85% 11% 

Non-Metro 948 251 26% 325 34% 64% 17% 

West 3,753 869 23% 1,498 40% 77% 15% 

Central Cities 1,909 467 24% 758 40% 76% 17% 

Suburbs 1,373 293 21% 597 44% 78% 14% 

Non-Metro 471 110 23% 142 30% 73% 14% 

United States 14,519 4,077 28% 5,379 37% 77% 15% 

Central Cities 7,483 2,202 29% 2,748 37% 75% 17% 

Suburbs 4,561 1,156 25% 1,847 40% 83% 12% 

Non-Metro 2,475 719 29% 784 32% 73% 14% 

*Current housing is severely inadequate or has too few bedrooms. 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–14
Table A–12

Housing Problems, Characteristics, and Earnings of Non-Elderly Renters by

Relative Income and Household Type, 1997

Income as % of HUD-Adjusted Area Median Income 

Total 0–20% 21–30% 31–50% 51–60% 61–80% 81–100% 

Renters With Children (Thousands) 12,729 2,373 1,354 2,512 987 1,564 1,208 

Children/Household 1.9 2.3 2.2 1.9 1.9 1.9 1.8 

Persons/Household 3.8 3.7 3.9 3.7 3.9 3.8 3.7 

Percent of Households With: 

Priority Problems 18 45 46 15 4 4 2 

Severe Physical Problems 3 3 3 2 2 3 2 

Rent Burden >50% of Income 16 43 44 12 2 1 0 

Rent Burden Only 12 30 34 11 2 1 0 

Multiple Problems 5 14 12 3 2 1 0 

Other Problems 26 6 23 51 47 34 20 

Moderate Physical Problems 6 2 5 8 10 7 5 

Rent Burden 31–50% of Income 17 3 21 43 29 19 9 

Rent Burden Only 13 2 11 32 26 16 9 

Crowded 8 2 10 12 14 12 7 

Multiple Problems 5 1 11 11 6 3 1 

Unassisted, No Problems 37 6 4 16 36 52 71 

In Assisted Housing 19 44 27 19 13 10 7 

Female Head 41 69 52 47 35 35 28 

Minority Head 52 70 68 61 49 43 37 

AFDC/SSI Income 19 52 28 16 11 8 3 

Social Security Income 6 5 9 6 5 5 6 

Income Below Poverty 33 100 89 23 3 0 0 

Income <150% of Poverty 50 100 99 82 35 14 1 

High School Graduate 72 56 56 68 73 78 85 

Earnings at Minimum Wage: 

At Least Half Time 80 19 79 91 96 97 98 

At Least Full Time 74 6 59 87 96 97 97 

Earnings Main Source of Income 80 35 76 88 95 95 96 

Housing Rated Poor 11 15 11 10 12 10 9 

Housing Rated Good 67 63 65 65 62 71 71 

Neighborhood Rated Poor 11 18 15 12 11 8 8 

Central City 44 59 49 48 42 40 36 

A–15
Table A–12 (continued) 

Income as % of HUD-Adjusted Area Median Income 

Total 0–20% 21–30% 31–50% 51–60% 61–80% 81–100% 

Other Non-elderly Renters* 15,666 1,784 866 1,961 1,021 1,986 2,119 

Persons/Household 1.6 1.4 1.5 1.5 1.5 1.6 1.6 

Percent of Households With: 

Priority Problems 15 48 62 28 9 5 3 

Severe Physical Problems 3 6 4 4 4 3 2 

Rent Burden >50% of Income 12 46 60 25 5 2 1 

Rent Burden Only 11 38 52 23 5 2 1 

Multiple Problems 2 8 10 3 2 0 0 

Other Problems 20 8 13 43 46 32 18 

Moderate Physical Problems 7 7 2 7 9 5 6 

Rent Burden 31–50% of Income 15 2 12 39 40 27 12 

Rent Burden Only 13 1 11 35 37 26 11 

Crowded 1 1 1 1 1 1 1 

Multiple Problems 2 2 2 4 3 2 0 

Unassisted, No Problems 55 26 4 16 36 55 73 

In Assisted Housing 10 18 20 14 8 8 6 

One Person in Household 52 63 62 61 58 56 54 

Female Head 34 44 46 38 39 37 38 

Minority Head 32 46 38 38 40 34 29 

AFDC/SSI Income 1 4 6 2 1 1 0 

Social Security Income 5 6 14 8 6 5 2 

Income Below Poverty 16 100 67 7 0 0 0 

Income <150% of Poverty 24 100 100 55 5 1 0 

High School Graduate 88 80 79 83 84 87 91 

Earnings at Minimum Wage: 

At Least Half Time 87 17 74 91 95 98 99 

At Least Full Time 82 1 39 84 94 97 98 

Earnings Main Source of Income 88 47 73 89 94 96 98 

Housing Rated Poor 8 12 9 11 7 8 7 

Housing Rated Good 71 63 70 68 70 69 71 

Neighborhood Rated Poor 7 10 7 9 6 9 7 

Central City 48 57 50 52 48 48 44 

*Excludes nonfamily reporting SSI income. 

Source: HUD-PD&R tabulations from the 1997 American Housing Survey 

A–16
Table A–13

Assisted Renters and Percent with Wages as Primary Source of Income,

by Household Type and Relative Income, 1999 

Income as Percent of HUD-Adjusted Area Median Family Income 

Total* 0–20% 21–30% 31–50% 51–60% 61–80% >80% 

All Households 4,198,253 1,699,710 1,246,469 1,001,953 132,498 82,905 34,718 

Number With Wages** 1,008,107 213,312 253,396 401,516 69,429 46,875 23,501 

Percent With Wages 24 13 20 40 52 57 68 

Families With Children 1,854,324 919,429 396,405 426,039 60,116 35,804 16,529 

Number With Wages 709,344 143,100 192,148 289,896 44,871 26,801 12,556 

Percent With Wages 38 16 49 68 75 75 76 

Non-elderly, No 

Disability 

1,656,342 859,846 316,873 376,173 55,240 33,053 15,153 

Number With Wages 728,524 151,931 197,749 294,673 44,738 26,704 12,671 

Percent With Wages 44 18 62 78 81 81 84 

Elderly Head 35,515 11,366 12,480 9,126 1,252 839 451 

Number With Wages 3,769 389 648 1,574 499 412 247 

Percent With Wages 11 3 5 17 40 49 55 

Disabled Person 

in Family 

162,467 48,216 67,052 40,739 3,624 1,912 925 

Number With Wages 11,677 883 2,056 6,030 1,456 841 416 

Percent With Wages 7 2 3 15 40 44 45 

Elderly Without Children 1,301,782 307,426 534,594 386,445 42,509 24,171 6,641 

Number With Wages 22,150 2,664 3,509 8,803 2,691 2,804 1,705 

Percent With Wages 2 1 1 2 6 12 26 

Non-elderly Adults With 

Disability, No Children 543,187 214,771 232,748 82,333 7,092 4,378 1,865 

Number With Wages 22,494 3,174 4,601 10,102 2,118 1,677 811 

Percent With Wages 4 2 2 12 30 38 44 

Others Without Children 498,961 258,088 82,723 107,137 22,782 18,551 9,681 

Number With Wages 219,479 54,322 44,823 80,325 17,928 14,434 7,650 

Percent With Wages 44 21 54 75 79 78 79 

* Excludes Indian housing. 

** “With Wages” means at least 50 percent of family income came from wage, salary, or self-employment. 

Source: HUD-PD&R tabulations from April 1999 program data (MTCS and TRACS) 

A–17
Table A–14

Measures of Housing Mismatch: Numbers of Affordable* Units Per 100 Renters

with Incomes Below 30 Percent or 50 Percent of Area Median Income by

Region, 1991, 1993, 1995, and 1997 

1991 1993 1995 1997 

Income as % of 

Area Median 

Income as % of 

Area Median 

Income as % of 

Area Median 

Income as % of 

Area Median 

<30% <50% <30% <50% <30% <50% <30% <50% 

All Units Affordable Below 

Cutoff/100 Renters With 

Income Below Cutoff 

U.S. Total 85 121 80 116 77 111 76 114 

Northeast 82 108 70 99 72 100 68 104 

Midwest 89 148 85 144 84 144 97 154 

South 95 131 93 126 91 122 85 125 

West 65 87 65 86 58 76 56 79 

Available** Units Affordable 

Below Cutoff/100 Renters 

With Income Below Cutoff 

U.S. Total 47 75 46 74 44 69 36 68 

Northeast 49 71 45 68 45 67 37 64 

Midwest 51 89 48 88 48 84 43 85 

South 54 83 53 81 48 76 38 73 

West 30 52 32 54 31 49 27 51 

Vacant Units Affordable 

Below Cutoff/100 Worst 

Case Needing Other 

Housing Below Cutoff 

U.S. Total 56 152 59 175 61 168 123 283 

Northeast 43 94 43 104 58 118 87 118 

Midwest 112 267 139 386 100 335 319 557 

South 77 256 106 325 107 295 171 453 

West 22 49 19 67 24 65 37 112 

* Affordable assuming 30 percent of income is spent for rent. 

** Units below cutoff vacant or occupied by households below cutoff. 

Source: HUD-PD&R tabulations from the 1991, 1993, 1995, and 1997 American Housing Surveys 

A–18
Appendix B 

Glossary 

Household and Family Types 

Family—The “families” eligible for HUD programs have traditionally included households 

with relatives, households with children, elderly single persons age 62 or older, and single 

persons with disabilities. The Cranston-Gonzalez National Affordable Housing Act of 1990 

broadened the statutory definition of “family” in a way that makes all households eligible for 

rental programs. In this report, however, the term “family” refers only to non-elderly “family 

households” in which one or more persons in the household are related to the householder by 

birth, marriage, or adoption. 

Families with children—Households with a child under age 18 present. 

Elderly—Household in which the head of household or spouse is age 62 or older and there 

are no children present. 

Other families—Households with a non-elderly householder and no children in which at 

least one person is related to the householder by birth, marriage, or adoption. 

Nonfamily households—Households with a single non-elderly person living alone or only 

with nonrelatives. 

Households having members with disabilities—Ideally, this category should include all 

non-elderly households with adults who have disabilities. However, none of the available 

data sources count these households perfectly. The American Housing Survey (AHS) proxy 

used in this and previous reports is known to be an underestimate because it counts only 

single persons living alone or with nonrelatives who report receiving Supplemental Security 

Income (SSI) income. HUD program data show appreciably more households (without 

children) having members with disabilities receiving rental assistance than does the AHS 

proxy. SSI data on SSI recipients who are blind or have other disabilities permit more 

complete counts of very-low-income renters receiving HUD assistance or having a severe 

rent burden. Even these data exclude very-low-income persons who have disabilities with 

incomes above SSI levels. 

Types of Income 

Income—Income in the AHS is based on the respondent’s reply to questions about income 

during the 12 months prior to interview. It includes amounts reported for wage and salary 

income, net self-employment income, Social Security or railroad retirement income, public 

assistance or welfare payments, and all other money income, prior to deductions for taxes or 

any other purpose. Comparison to independent sources of data on household income suggest 

that AHS respondents underreport income by some 15 percent on average. In 1993, however, 

the AHS began asking more detailed questions on nonwage income, and the share of 

A–19
households reporting nonwage income rose from 63 percent (in 1991) to 77 percent. 

Following HUD rules for income eligibility, the first three worst case reports also included 

imputed income from equity in an owned home as income for owners, but income from 

equity is not included in this report. 

Family income—Reported income from all sources for the householder (the first household 

member 18 years or older who is the owner or renter of the housing unit) and other 

household members related to the householder. 

Household income—Reported income from all sources for all household members. 

Housing Problems 

Overcrowding—The condition of having more than one person per room in a residence. 

Rent or cost burden—Ratio between payments for housing (including utilities) and reported 

household income. The calculation used in this report is based on gross income reported for 

the previous 12 months. It does not make the adjustments to income required by housing 

assistance programs before percentage-of-income rents are determined. To the extent that 

respondents underreport total income, the AHS estimates overcount the number of 

households with cost burden. 

Moderate rent or cost burden—Housing costs between 31 and 50 percent of reported 

income. 

Severe rent or cost burden—Housing costs exceeding 50 percent of reported income. 

Inadequate housing—Housing with severe or moderate physical problems, as defined in the 

AHS since 1984. These definitions are presented in Appendix A of the AHS published 

volumes in detail and in Appendix D of this report. Briefly, a unit is defined as having severe 

physical problems if it has severe problems in any of five areas: plumbing, heating, electrical 

system, upkeep, and hallways. It has moderate problems if it has problems in plumbing, 

heating, upkeep, hallways, or kitchen, but no severe problems. As Appendix C of this report 

details, some of the questions underlying definitions of inadequate housing were changed in 

the 1997 questionnaire. 

Priority housing problems—Problems qualifying for Federal preference in admission to 

assisted housing programs between 1988 and 1996: paying more than one-half of income for 

rent (severe rent burden), living in severely substandard housing (including being homeless 

or in a homeless shelter), or being involuntarily displaced. Because the AHS sample tracks 

housing units and thus cannot count the homeless, AHS estimates of priority problems in this 

report include only households in housing units with cost burdens above 50 percent of 

income or housing with severe physical problems. 

A–20
Income Categories 

HUD-adjusted area median family income (HAMFI)—In 1974, Congress defined “low 

income” and “very low income” for HUD rental programs as incomes not exceeding 80 and 

50 percent, respectively, of the area median family income, as adjusted by HUD. Statutory 

adjustments now include upper and lower caps for areas with low or high ratios of housing 

costs to income and, for each nonmetropolitan county, a lower cap equal to its State’s 

nonmetropolitan average. Estimates of the median family income and the official income 

cutoffs for each metropolitan area and nonmetropolitan county are based on the most recent 

decennial census results and then updated each year by HUD. Each base income cutoff is 

assumed to apply to a household of four, and official cutoffs are further adjusted by 

household size: one person, 70 percent of base; two persons, 80 percent; three persons, 90 

percent; five persons, 108 percent; six persons, 116 percent; and so on. 

Low income—Reported income not in excess of 80 percent of HAMFI or, if lower, the 

national median family income. According to the AHS, in 1997, 42 percent of U.S. 

households reported incomes that fell below the low-income cutoffs. 

Very low income—Income not in excess of 50 percent of HAMFI. In 1997, 27 percent of 

U.S. households reported income below the very-low-income cutoffs. 

Extremely low income—Income not in excess of 30 percent of HAMFI. In 1997, 16 percent 

of U.S. households reported income below 30 percent of HAMFI. 

Poor—Household income below the official national poverty cutoffs for the United States 

for that household size. The poverty cutoff for a family of four approximates 33 percent of 

HAMFI. Forty-four percent of very-low-income households and 85 percent of extremelylow-income households are poor. 

Middle income—For this report, income between 81 and 120 percent of HAMFI. About 

one-fifth of U.S. households (19 percent) reported income in this category in 1997. 

Upper income—For this report, income above 120 percent of HAMFI. Almost two-fifths of 

U.S. households (39 percent) reported income in this category in 1997. 

Rental Affordability Categories 

Several Federal rental programs define “affordable” rents as those requiring not more than 30 

percent of an income cutoff defined in relation to HAMFI. As discussed in Exhibit 4, for 

example, under the Low-Income Housing Tax Credit (LIHTC), housing units with rents up to 

(30 percent of) 60 percent of HAMFI qualify as affordable and eligible for the credit. This 

report generalizes the approach developed to define LIHTC maximum rents for units of 

different size to categorize units as affordable to incomes at or below 30 percent of HAMFI, 

between 31 and 50 percent of HAMFI, and above 50 percent of HAMFI. Gross rents for each 

unit, including payments for utilities, are compared to (30 percent of) HUD’s 30 percent and 

50 percent of HAMFI income limits. The income limits are adjusted for number of bedrooms 

A–21
using the formula codified at U.S.C. 42(g)(2)( C ): no bedrooms, 70 percent of base; one 

bedroom, 75 percent; two bedrooms, 90 percent; three bedrooms, 104 percent; four 

bedrooms, 116 percent. This formula assumes that an efficiency houses 1 person, a onebedroom unit houses 1.5 persons, and each additional bedroom houses another 1.5 persons. 

For vacant units, the costs of any utility that would be paid by an occupant were allocated 

using a hot deck technique with a matrix of structure type, AHS climate code, and eight 

categories of gross rent. 

Housing Assistance Status 

Receiving assistance—As discussed in Appendix C of this report, the AHS questions on 

receiving assistance were changed in both content and order in 1997. Formerly, the worst 

case reports characterized as “assisted” those households responding “yes” to the following 

AHS questions: “Is the building owned by a public housing authority? Does the Federal 

Government pay some of the cost of the unit? Do the people living here have to report the 

household’s income to someone every year so they can set the rent?” 

In this report, however, the 1997 estimate of assisted households includes those responding 

affirmatively to one or more of the questions “As part of your rental agreement, do you need 

to answer questions about your income whenever your lease is up for renewal? (If so,) to 

whom do you report your income? Do you pay a lower rent because the government is 

paying part of the cost of the unit? Is the building owned by a public housing authority?” 

Because State and local assistance are not separately identified by these questions, the 

reestimates of assisted households done in this report for 1991, 1993, and 1995 added those 

households responding that “a State or local government pay[s] some of the cost of the unit” 

to the estimates made earlier from the questions listed above. 

Worst case or with acute needs—Unassisted very-low-income renters with the priority 

housing problems that formerly gave them preference for admission to rental assistance 

programs. In this report, for the first time, unassisted renters exclude those reporting State or 

local assistance. 

Location 

(Standard) Metropolitan Statistical Area—From 1973 to 1983, the definitions of 

metropolitan location in Annual Housing Survey data corresponded to the 243 Standard 

Metropolitan Statistical Areas (SMSAs) used in the 1970 census. Since 1984, metropolitan 

location in the AHS has referred to the MSAs defined in 1983, based on the 1980 census. 

Region—The four census regions are the Northeast, Midwest, South, and West. 

A–22
Appendix C 

Changes in the 1997 American Housing Survey and Their 

Impacts on Estimates of Worst Case Needs 

The 1997 national American Housing Survey (AHS) surveyed the same sample of 

households as in 1995 and asked basically the same questions. Nevertheless, the procedures 

used in gathering and processing the data differ from those used in previous surveys in 

several important respects that affect all data gathered by the survey: 

•	 It is the first time that the survey was conducted using Computer Assisted Personal 

Interviewing (CAPI). CAPI incorporated a wide range of improvements that had been 

identified during 2 years of research and testing. Skip patterns involving complex 

branching and calculations that would not have been appropriate with a paper 

questionnaire became simple with an automated instrument for the respondent and field 

representative. It was almost impossible for field representatives to skip appropriate 

questions. Online editing features reduced errors at the point of data collection. These 

changes should improve the quality of the data. In addition, the timeliness of data 

delivery will improve in the future. Nevertheless, responses to questions are likely to be 

affected in unknown ways by these changes, possibly making results for 1997 less 

comparable with earlier results, even when exactly the same questions were asked. 

•	 The Census Bureau changed computer platforms from a UNISYS mainframe to a UNIX 

workstation and changed its processing software/language to SAS. These changes mean 

that all the software for processing the data, editing the data, allocating missing values, 

recoding and transforming variables, preparing tables, and estimating variances had to be 

rewritten. 

Appendices A and C of the Census Bureau’s published volume in the 1997 AHS (American 

Housing Survey for the United States, 1997, Current Housing Reports H150/97) provide 

more detail on all changes. 

This report’s estimates of worst case needs were also directly affected by changes in the 

questions used to identify households receiving rental assistance. In AHS data prior to 1997, 

households were counted as receiving Federal housing assistance if they answered “yes” to 

one of the following questions: “Is the building owned by a public housing authority? Does 

the Federal Government pay some of the cost of the unit? Do the people living here have to 

report the household’s income to someone every year so they can set the rent?” Although the 

number and characteristics of households responding affirmatively to these questions were 

generally consistent with program data, detailed examination revealed that households often 

do not report their assistance status correctly. (See Duane T. McGough, Characteristics of 

HUD-Assisted Renters and Their Units in 1998, May 1997.) In particular, many of the 

households responding that “a State or local government pay[s] some of the cost of the unit” 

were found to participate in Federal assistance programs, suggesting that the past practice in 

worst case reports of counting such households as unassisted was misleading. 

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Based on research using focus groups of assisted households, a different battery of questions 

was developed to better identify receipt of housing assistance. Accordingly, the order and 

content of the AHS questions about housing assistance were changed. The questions now 

used to identify assisted households are: “As part of your rental agreement, do you need to 

answer questions about your income whenever your lease is up for renewal? (If so,) to whom 

do you report your income? Do you pay a lower rent because the government is paying part 

of the cost of the unit? Is the building owned by a public housing authority?” 

As noted in the body of the report, this new battery of questions identifies 5.6 million 

households as receiving rental assistance, 400,000 more than the total of units with Federal, 

State, or local assistance reported in 1995. This total is consistent with the sum of all 

households actually assisted by Federal rental assistance programs run by HUD and the 

Department of Agriculture, low-income renters occupying units assisted by the Department 

of Treasury’s low-income housing tax credit (LIHTC), and State and local programs. It is 

unlikely, however, that the number is comparable to the 1995 estimate, or that the total 

number assisted actually grew by 400,000 over the 1995–97 period. 

Because worst case needs also, by definition, include households with severe physical 

problems, the 1997 estimates are also affected by changes in questions and processing 

regarding plumbing and other physical problems. Many questions were changed in wording 

or sequence to allow respondents to concentrate sequentially on whether the problem 

occurred in their house, met the (more precise) definition, and occurred within the time 

period (such as the previous 3 months) specified. The revised questionnaire counts 1.8 

million households as having severe physical problems in 1997. Although this estimate 

should be more accurate for 1997 than previous estimates were, it can not be directly 

compared with the 1995 count of 2 million. Specifically, it is unlikely that this accurately 

implies that the total number of units with severe physical problems fell by 200,000 between 

1995 and 1997. 

Income is another important component of the worst case needs determination. Some 

changes occurred in the collection of income data in 1997. Although the text of the questions 

remained the same, some persons—those age 21 or older who were related to the reference 

person and who did not contribute toward household expenses—were no longer asked 

separately about wage versus nonwage income. This change contributed to a drop in 

reporting nonwage income from 74 percent of households with one or more nonwage sources 

in 1995 to 64 percent in 1997. An accompanying upturn in those reporting wage income 

produced a median household income somewhat higher than the 1995 figure. However, the 

count of households with income less than $5,000 rose by 540,000 between 1995 and 1997. 

The Census Bureau estimates that about 60 percent of the increase occurred in households 

reporting zero or negative household income. Although households with zero or negative 

income are by definition not included as households with severe rent burden, they 

nevertheless are counted as having extremely low incomes, and thus affect the measures of 

affordable units per household in the report. 

To summarize, because of the improvements in AHS questions and processing, HUD 

believes that the 1997 estimates of worst case needs more accurately count households with 

severe physical problems and households not receiving assistance than did estimates from 

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earlier surveys, and thus provide a more reliable point-in-time estimate of worst case needs. 

Because of the major differences in questions identifying assistance and other differences in 

processing, however, the Census Bureau recommends against using differences between the 

1995 and 1997 worst case needs estimates alone as indicative of trends. 

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A–26
Appendix D 

Procedures Used to Estimate 

Housing Needs and Rental Affordability 

From American Housing Survey Data 

To accurately estimate worst case needs for housing assistance from American Housing 

Survey (AHS) data, it is essential to determine whether household incomes fall below HUD’s 

official very-low-income limits [50 percent of HUD-adjusted area median family income 

(HAMFI)], whether a household already receives housing assistance, and whether an 

unassisted income-eligible household has one or more of the priority problems that formerly 

conferred tenant selection preference (rent burdens exceeding 50 percent of income, 

substandard housing, or being involuntarily displaced). 

This appendix discusses the procedures and definitions used with microdata from the 1997 

AHS to estimate the number of households in different income categories that have worst 

case needs or other housing problems and to estimate the number of rental units in 

affordability categories defined as percentages of HAMFI. 

•	 All estimates in this report base income category and rent burdens on reported 

household income for the past 12 months for all households. 

•	 Because HUD’s official income limits have been based on 1990 census data since 1993, 

limits based on 1990 census data, updated for inflation by the CPI, were used for this 

report. 

•	 Area income limits. To categorize households in relation to “local” income limits as 

accurately as possible within the limitations of the geography shown on the AHS public 

use files, household income was compared with area income limits for all households. 

Very-low- and low-income cutoffs for a household of four—that is, 50 or 80 percent of 

HAMFI, respectively—were defined for each unit of geography identified on the AHS 

national microdata tapes. Official income limits were used directly for each of the 141 

MSAs identified on the AHS tapes. For housing units outside these MSAs, the AHS 

geography identifies only four regions, metropolitan status, and six climate zones. 

Average income limits were estimated for each of these 48 locations weighting by 1990 

population. 

•	 Categorizing households by income. For all households, income status is determined 

by comparing household income with the very-low- and low-income cutoffs, with 

appropriate adjustments for household size. Households reporting negative income were 

categorized as middle-income if their monthly housing costs were above the Fair Market 

Rent (FMR) and they lived in adequate housing, since many households in this situation 

appear to be reporting temporary accounting losses. 

•	 Receiving housing assistance. As discussed in Appendix C, to more accurately identify 

households participating in housing assistance programs, the order and content of the 

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AHS questions about housing assistance were changed in 1997. The 1997 questions 

used to identify assisted households are: “As part of your rental agreement, do you need 

to answer questions about your income whenever your lease is up for renewal? (If so,) to 

whom do you report your income? Do you pay a lower rent because the government is 

paying part of the cost of the unit? Is the building owned by a public housing authority?” 

From these questions, it is no longer possible to distinguish between Federal and State or 

local programs. Accordingly, the counts of assisted households in this report are not 

comparable to data from earlier reports. To increase comparability between earlier data and 

the 1997 approach, with data from 1991, 1993, and 1995 in this report, households were 

counted as receiving housing assistance if they answered “yes” to the question “Does the 

State or local government pay some of the cost of the unit?” or to one of the three AHS 

questions used in previous worst case reports: “Is the building owned by a public housing 

authority? Does the Federal Government pay some of the cost of the unit? Do the people 

living here have to report the household’s income to someone every year so they can set the 

rent?” 

•	 Severe or moderate physical problems. The definitions are those used since 1984 in 

AHS and defined in Appendix A of published AHS volumes. As discussed in Appendix 

C of this report, however, some of the questions underlying the definitions were 

changed in 1997, thus making 1997 results less comparable to earlier results. A unit is 

considered severely inadequate if it has any one of the following five problems: 

—Plumbing. Lacking piped hot water or a flush toilet or lacking both bathtub and 

shower, all for the exclusive use of the unit. 

—Heating. Having been uncomfortably cold last winter for 24 hours or more or three 

times for at least 6 hours each due to broken down heating equipment. 

—Upkeep. Having any five of the following six maintenance problems: leaks from 

outdoors, leaks from indoors, holes in the floor, holes or open cracks in the walls or 

ceilings, more than a square foot of peeling paint or plaster, or rats in the last 90 days. 

—Hallways. Having all of the following four problems in public areas: no working light 

fixtures, loose or missing steps, loose or missing railings, and no elevator. 

—Electrical. Having no electricity or having all of the following three electrical 

problems: exposed wiring, a room with no working wall outlet, and three blown fuses or 

tripped circuit breakers in the last 90 days. 

A unit is defined as moderately inadequate if it has any of the following five problems, but 

none of the severe problems: 

—Plumbing. Having all toilets break down simultaneously at least three times in the 

last 3 months for at least 6 hours each time. 

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—Heating. Having unvented gas, oil, or kerosene heaters as the main source of heat 

(since these heaters give off unsafe fumes). 

—Upkeep. Having any three of the six upkeep problems mentioned under severe 

problems. 

—Hallways. Having any three of the four hallway problems mentioned under “severely 

inadequate.” 

—Kitchen. Lacking a sink, range, or refrigerator for the exclusive use of the unit. 

•	 Weighting of AHS estimates, 1990 based. Because each housing unit in the AHS 

sample represents many other units, the sample data are adjusted so that each year’s 

total matches independent estimates of the total housing stock. For 1997, these 

independent estimates were based on the 1990 Census of Housing (1990 weights). 

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