AFFORDABLE HOUSING NEEDS 2005: 

Report to Congress 

US Department of Housing and Urban Development 

Office of Policy Development and Research 
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AFFORDABLE HOUSING NEEDS 2005:


Report to Congress 

May 2007 
Table of Contents

Executive Summary.................................................................................................... 1

Unmet Needs for Decent, Affordable Rental Housing Increased 

Substantially During the 2003–2005 Period........................................................ 1

The Population with Worst Case Needs............................................................... 2

The Character of Worst Case Needs.................................................................... 2

The Trend in Worst Case Needs............................................................................ 2

The Geography of Worst Case Needs................................................................... 3

The Duration of Rent Burden.............................................................................. 3

Availability of Affordable Rental Housing and Worst Case Needs.................... 4

Neighborhood Poverty and Worst Case Needs.................................................... 4

Chapter 1. Introduction........................................................................................... 7

Terms and Sources................................................................................................. 7

. . Explanation of Household Income Categories................................................... 8

. . Housing Assistance and Affordable Housing Programs..................................... 9

Chapter 2. Incidence of Worst Case Needs for Housing Assistance................. 11

Snapshot of Worst Case Needs........................................................................... 11

. . Recent Changes in Worst Case Needs.............................................................. 13

. . Factors Affecting Worst Case Needs................................................................. 14

Importance of Income......................................................................................... 14

. . Effect of Income on Incidence of Worst Case Needs....................................... 15

. . Working Households with Worst Case Needs................................................... 16

Demographic Factors Affecting Worst Case Needs........................................... 17

. . Race and Ethnicity............................................................................................ 17

. . Household Structure......................................................................................... 18

Geographic Variation in Worst Case Needs....................................................... 20

. . Worst Case Needs by Region............................................................................ 20

. . Worst Case Needs by Urban Geography........................................................... 22

Markets and Economic Factors.......................................................................... 23

. . Affordability of Units that Became Vacant during 2003–2005........................ 25

. . Economic Factors Increasing Worst Case Needs.............................................. 26

Summary.............................................................................................................. 28

Chapter 3: Duration of Rent Burden.................................................................... 29

Assessing Dynamics of Rent Burdens................................................................ 29

Exits from Severe Rent Burdens........................................................................ 30

Additional Renters with Severe Cost Burdens in Later Years......................... 32

Summary.............................................................................................................. 33
Chapter 4. Availability of Affordable Housing Stock....................................... 35

Why Housing Supply is An Issue........................................................................ 35

. . Affordability, Availability, and Adequacy......................................................... 35

Measures of Affordability and Availability........................................................ 36

. . Rental Stock by Income.................................................................................... 37

. . Rental Stock by Location.................................................................................. 38

. . Sufficiency Relative to Fair Market Rent.......................................................... 40

. . Trends in Rental Stock...................................................................................... 40

. . Crowding........................................................................................................... 42

Summary.............................................................................................................. 44

Chapter 5. Neighborhood Poverty and Worst Case Needs................................ 47

Poverty and Neighborhood Distress................................................................... 47

. . Categorizing Neighborhoods............................................................................ 47

Distribution of Worst Case Needs Relative to Neighborhood Poverty............ 48

Relation of Neighborhood Poverty to Incidence of Worst Case Needs........... 50

Summary.............................................................................................................. 51

Appendix.................................................................................................................... 53

Works Cited.......................................................................................................... 53

Appendix A. Data on Housing Problems and Supply of Affordable 

Housing................................................................................................................. 55

. . List of Tables..................................................................................................... 55

Appendix B. Data Source, Concepts, and Methodology Used to Estimate 

Worst Case Needs................................................................................................ 83

Appendix C. Comparison of AHS with ACS and Joint Center for Housing 

Studies Report, State of the Nation’s Housing 2006.......................................... 93
——

E x e c u t i v e S u m m a r y

Executive Summary

In 1990, the U.S. Senate Appropriations Committee directed HUD to “resume the

annual compilation of a worst case housing needs survey of the United States ...

[to estimate] the number of families and individuals whose incomes fall 50 percent

below an area’s median income, who either pay 50 percent or more of their monthly

income for rent, or who live in substandard housing.”

Households with “worst case needs” are defined as unassisted renters with very low

incomes who have one of two “priority problems” either paying more than half of

their income for housing (“severe rent burden”) or living in severely substandard

housing. Renters are classified by income using three income limits: Low Income

(LI) if their income does not exceed 80 percent of area median income (AMI), Very

Low Income (VLI) if income is not more than 50 percent of AMI, and Extremely

Low Income (ELI) if income is not more than 30 percent of AMI.

This report is the tenth in a series of Worst Case Needs reports to Congress. This

2005 report is organized into five basic sections. Chapter 1 provides an introduction,

including a discussion of terms and sources. Chapter 2 outlines the findings of worst

case needs by various categories such as demographics and geography. Chapter 3

presents an analysis using data from the Census Bureau’s Survey of Income and

Program Participation to examine the duration of severe rent burdens. Chapter 4

assesses the supply of affordable rental housing. Chapter 5 presents new analysis of

how worst case needs relate to neighborhood poverty rates.

The key findings of this report are as follows.

Unmet Needs for Decent, Affordable Rental Housing 

Increased Substantially During the 2003–2005 Period

Finding 1. The number of households with worst case housing needs in 2005 was

5.99 million, a statistically significant increase of 817,000 households (16 percent)

from the 5.18 million in 2003.1

Finding 2. The proportion of American households that had worst case needs in

2005 was 5.50 percent, up from 4.89 percent in 2003. Among extremely low-income

renters without housing assistance, the proportion increased significantly from 66

percent to 72 percent, and among other very low-income households without housing

assistance the proportion increased from 22 percent to 27 percent.

1 It is important to note that since these figures do not cover the latter part of 2005, the increase in

worst case needs is not attributable to the devastation caused by hurricanes Katrina and Rita in the

Gulf Coast region.
— —

The Population with Worst Case Needs

Finding 3. The majority of households with worst case needs, 4.64 million households, had extremely low incomes (77 percent), while an additional 1.35 million

households had very low incomes that exceeded the extremely low-income threshold

(23 percent). The increase in worst case needs during the 2003–2005 period reflected

this general pattern in incomes: of the 817,000 increase in households with worst

case needs, 644,000 households had extremely low incomes and the remaining

173,000 households were in the upper end of the very low-income range.

Finding 4. The 5.99 million households with worst case needs included 1.29 million

elderly households and 2.32 million families with children. There were 542,000

households headed by a non-elderly person with disabilities and 324,000 households

categorized as “other” types of families, generally consisting of related persons

without children. The group with the largest increase in worst case needs from 2003

to 2005 were families with children—475,000 households.

Finding 5. There were 1.51 million “other non-family households” with worst case

needs, most consisting of a single person living alone: 48.4 percent were single

male-headed households and 47.7 percent were single female-headed households.

Finding 6. Among households with worst case needs, 3.10 million households were

non-Hispanic white, up from 2.76 million in 2003; 1.34 million households were

non-Hispanic black, up from 1.04 million in 2003; and 1.17 million households were

Hispanic, also increased from 1.04 million in 2003.

The Character of Worst Case Needs

Finding 7. Of the 5.99 million renter households with worst case housing needs,

5.47 million households (91 percent) had severe rent burden as their only priority

housing problem. Severe rent burden is defined as gross rent greater than 50 percent

of income.

Finding 8. Among households with worst case needs in 2005 were 520,000

households living in severely inadequate housing units. Half, 260,000 households,

had severely inadequate housing as their only priority housing problem, while an

additional 260,000 households had both severe rent burden and severely inadequate

housing as priority problems.

Finding 9. Average rent burdens among households with worst case needs grew

more severe during the 2003–2005 period. Average monthly incomes fell from $673 to

$648, while average gross rents increased from $607 per month to $647 per month.

The Trend in Worst Case Needs

Finding 10. The number of households with worst case needs remained near 5 million in most years since 1995, until rising to close to 6 million in 2005. There were

5.20 million total households with worst case needs in 1995, 5.38 million in 1997,
— —

E x e c u t i v e S u m m a r y

4.86 million in 1999, 5.01 million in 2001, 5.18 million in 2003, and 5.99 million in

2005.

Finding 11. Families with children represented more than one-third (38.8 percent) of

households with worst case needs in 2005. In 2005, 2.32 million of these households

had worst case housing needs, an increase of 475,000 families from the level in

2003. Among very low-income renter families with children, 35.9 percent had worst

needs, an increase from a proportion of 29.0 percent in 2003.

The Geography of Worst Case Needs

Finding 12. All regions of the country shared in worst case needs and all regions

experienced increases: 208,000 households in the Northeast, 143,000 households in

the Midwest, 338,000 households in the South, and 129,000 households in the West.

Finding 13. The number of households with worst case needs in central cities was

2.91 million during 2005, a 14.9 percent increase from 2003. In the suburbs, the

number of households with worst case needs in 2005 was 2.09 million, a 5.3 percent

increase from 2003. In non-metropolitan areas, the number of households with worst

case needs was 0.99 million, a 51 percent increase from 2003. This large increase is

associated with both a substantial increase in the number of very low-income renters

in non-metro areas and an increase in the likelihood that those renters would have

worst case needs.

The Duration of Rent Burden

The report also contains findings, based on the Census Bureau’s Survey of Income

and Program Participation, that examine the duration or length of time that renters

experienced severe rent burdens. The reader should note that the analysis of this section focused on individual “householders” rather than households or families so that

the individuals could be accurately tabulated if they changed households.

Finding 14. Among unassisted very low-income renter householders who reported

a severe rent burden in 2001, 53.3 percent continued to have such a burden in 2002,

while 46.7 percent either ceased having such a burden or fell out of the “unassisted

renter” category. In 2003, the proportion who continued to have severe rent burden

declined to 45.2 percent of the original group.

•	 Among the group who remained unassisted renters and exited severe rent

burden in 2002 (33.1 percent), 24.4 percent still had a “moderate rent burden,”

paying 30–50 percent of their income for rent in 2002. Only 8.6 percent were

able to reduce their monthly housing costs to below 30 percent of income. In

2003, these figures improved somewhat, as 20.7 percent of unassisted householders who initially had severe rent burdens now had moderate rent burdens,

and another 15.3 percent had low rent burdens.
——

•	 Among the very low-income unassisted renters with a severe rent burden in

2001 that exited out of this category, some did so for reasons other than changes

in rents or incomes. About 7 percent (6.8 percent in 2002 and 7.3 percent in

2003) were no longer unassisted because they obtained housing assistance, and

another group moved into owner-occupied housing (5.7 percent in 2002, going

up to 10.0 percent by 2003).

•	 Exit from a severe rent burden is no guarantee that the renter will not return to

that status. About one-fifth of renters (19.9 percent) who exited from a severe

rent burden in 2002 reported having a severe rent burden again in 2003. Of the

remaining renters, the same proportion had moderate rent burdens as had low

burdens (29.2 percent for each).

Finding 15. A significant number of renters without a severe rent burden in 2001

subsequently entered that category in either 2002 or 2003. Of those who initially had

moderate rent burdens, 16.5 percent had severe burdens in 2003. Likewise, even renters with rent burden below 30 percent of income in 2001 ran the risk of moving to a

moderate rent burden (10.8 percent) or to a severe rent burden (9.0 percent) by 2003.

Availability of Affordable Rental Housing and Worst Case 

Needs

Finding 16. Many units that would be affordable to very low-income households

are not available to them (often because they are occupied by higher-income households). In 2005, there were only 77 units affordable and available for rent for every

100 very low-income renter households. This is a decrease from the 81:100 ratio

in 2003—indicating a tighter market for low-rent units. For extremely low-income

renter households, the ratio is worse: 40 units per 100 households, down from 43:100

in 2003.

Finding 17. The decline in availability of affordable units for very low-income

renters during the 2003–2005 period can be attributed to a modest increase in renter

households that interacted with stagnant income levels and rising monthly housing

costs. For both very low-income and extremely low-income renters, affordability

ratios declined by over 10 units per 100 renters and availability ratios declined by

over 4 units per 100 renters.

Neighborhood Poverty and Worst Case Needs

Finding 18. Very low-income renters and households with worst case needs are more

likely than most Americans to live in poorer neighborhoods, as 32.3 percent of very

low-income renters and 30.6 percent of renters with worst case needs were living

in the 20 percent of neighborhoods with the highest poverty rates during 2005. The

concentration of very low-income renters in neighborhoods with higher poverty rates

may reflect the lower rents that are typically found in poorer neighborhoods.
— —

E x e c u t i v e S u m m a r y

Finding 19. “Better neighborhoods” with lower poverty rates ranked in the lowest half

of the distribution contain 30.5 percent of very low-income renters and 33.8 percent

of worst case needs. Overall, the distribution of worst case needs is very similar to

the distribution of very low-income renters nationwide and in terms of metropolitan

status. The somewhat greater proportion of worst case households found in lowpoverty neighborhoods suggests a combination of factors: (a) that severe housing

problems in low-poverty neighborhoods result primarily from a lack of affordable

housing options in some areas; and (b) a small fraction of very low-income renters

may accept severe rent burdens in order to live in a better neighborhood. More

research is needed to determine to what extent either of these explanations affects the

geographic pattern of worst case needs.

——

I n t r o d u c t i o n

Chapter 1. Introduction

Since 1991, the Department of Housing and Urban Development (HUD) has issued

regular reports to Congress on “worst case needs” for housing assistance among

the nation’s very-low-income renters. These reports developed from requests from

Congressional Committees in the 1980s for information on housing needs. In 1990,

the U.S. Senate Appropriations Committee directed HUD to “resume the annual

compilation of a worst case housing needs survey of the United States ... [to estimate] the number of families and individuals whose incomes fall 50 percent below

an area’s median income, who either pay 50 percent or more of their monthly income

for rent, or who live in substandard housing.”2 This report is the tenth in a series of

Worst Case Needs reports to Congress.3

Households with “worst case needs” are defined as unassisted renters with very-low

incomes (below 50 percent of area median income) who pay more than half of

their income for housing or live in severely substandard housing. HUD originally

developed the definition of worst case needs in consultation with the Office of

Management and Budget and Congressional Committees. It was based on the federal

preference rules that prioritized admissions for housing assistance programs in the

1980s and early 1990s. To assess changes over time, HUD has retained this consistent definition of “worst case needs” for affordable housing.

While federal preferences for housing assistance were subsequently repealed, the

current definition of worst case needs is still highly useful. As stated, a consistent

definition makes it possible to assess changes over time, and severe rent burden and

physical adequacy of living conditions remain key indicators of the overall need for

safe and affordable housing.

Terms and Sources 

This report uses data from 2005—the latest available data from the American

Housing Survey (AHS). The AHS is sponsored by HUD and conducted by the U.S.

Census Bureau, and is the only detailed periodic national housing survey in the

United States. It provides nationally representative data on a wide range of housing

2 Committee Report to accompany H.R. 5158, The VA-HUD Appropriations Act for FY 1991 (S.

Rpt. 101-474).

3 HUD’s previous reports to Congress about worst case housing needs are as follows:

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); Rental Housing Assistance—The Crisis Continues (April 1998); Rental Housing

Assistance—The Worsening Crisis: A Report to Congress on Worst Case Housing Needs, (March

2000); A Report on Worst Case Housing Needs in 1999: New Opportunity Amid Continuing Challenges, Executive Summary (January 2001); Trends in Worst Case Needs for Housing, 1978–1999

(December 2003); and Affordable Housing Needs: A Report to Congress on the Significant Need for

Housing (December 2005). These publications are available online at http://www.huduser.org.
——

subjects including apartments, single-family homes, mobile homes, vacant homes,

family composition, income, housing and neighborhood quality, housing costs,

equipment, fuel type, size of housing unit, and recent moves. National data are

collected every 2 years from a sample of about 63,000 housing units. The survey,

which started in 1973, has sampled the same housing units since 1985, while newly

constructed units are also sampled to ensure both continuity and timeliness of the

data. Information from the Worst Case Needs reports has helped inform public

policy decisions, including decisions on targeting of existing resources, the need for

additional resources, and the form such assistance should take.

The report also includes an analysis using data from the Census Bureau’s Survey

of Income and Program Participation (SIPP), which was included for the first time

in the December 2005 “Affordable Housing Needs” report. These data are used to

augment the report’s findings by analyzing not only the prevalence of severe rent

burdens but also their duration for a variety of lower income households.

Explanation of Household Income Categories 

Many HUD programs and other federal housing programs use specific income limits

to determine whether households qualify for those programs. HUD has developed a

very useful means of establishing these income limits so that they reflect area income

levels. Income limits are set on the basis of area median incomes for each metropolitan area and non-metropolitan county. Area median incomes are also adjusted for

family size before income limits are determined.

The terms “low-income,” “very low income,” and “extremely low income” used in

this report follow the specific meanings of those terms as used in several of HUD’s

affordable housing programs:

Exhibit 1-1. HUD Income Limits in Selected Cities, FY 2005

Annual Income for 4-Person Household

30%

Median

50%

Median

80%

Median Median

New York City $18,850 $31,400 $50,250 $54,400

Los Angeles 19,650 32,750 52,400 54,450

Chicago 22,600 37,700 58,000a 69,700

Houston 18,300 30,500 48,800 61,000

Philadelphia 20,650 34,400 55,050 68,800

Phoenix 17,600 29,300 46,900 58,600

Jacksonville 17,350 28,950 46,300 57,850

Washington, DC 26,800 44,650 58,000a 89,300

Denver 21,500 35,850 57,350 71,650

Atlanta 21,500 35,600 56,950 70,250

Seattle 23,350 38,950 58,000a 72,250

a

 When the low-income threshold (80 percent of median income) for a locality exceeds 

the national U.S. median family income level ($58,000 for FY 2005), the national 

median level is used for purposes of HUD programs. HUD can also make exceptions in 

limited circumstances, for instance, if decreases in the local median income occur due to 

re-benchmarking by the Census (e.g., New York City in FY 2005).

•	 Low Income. Not more than 80 percent

of area median income. Defined by the

United States Housing Act of 1937 and

used as an income limit for many rental

and homeownership programs.

•	 Very Low Income. Not more than 50

percent of area median income. Defined

by the United States Housing Act of

1937 and used as an income limit for

many rental programs.

•	 Extremely Low Income. Not more than

30 percent of area median income.

Although “extremely low income” is

not a defined term in the U.S. Housing

Act of 1937, the income threshold itself

is used for the purpose of establishing

admissions standards in HUD’s major

rental assistance programs.
——

I n t r o d u c t i o n

Housing Assistance and Affordable Housing Programs 

Since the beginnings of federal rental assistance with the U.S. Housing Act of 1937,

programs have evolved to operate in three basic ways:

•	 Public housing. These units are owned and managed by local public agencies.

From 1937 to the mid-1980s, public housing was built to provide affordable

housing for low-income families. Today, there are 1.1 million occupied units of

public housing. Public housing continues to provide affordable housing to the

most diverse and lowest income population of all HUD programs. Families are

generally required to pay 30 percent of their income for rent.

•	 Project-based assisted housing. Through a variety of programs in the 1960s

through the 1980s, the federal government produced 1.3 million affordable

rental units, largely privately owned, that are now supported by project-based

Section 8 rental assistance contracts and reserved for low-income families who

usually pay 30 percent of their income for rent.

•	 Tenant-based housing assistance. These programs provide rental assistance

vouchers to 2.0 million households in affordable privately owned housing units

selected by the household. In general, families are required to pay 30 percent of

their income for rent, but are allowed to pay more if they choose.

A number of other federal housing programs produce affordable housing, typically with less costly subsidies. While these units are often more affordable than

market-rate units, without additional rental subsidies (such as vouchers), extremely

low-income families would often have to pay well over 30 percent of their income

for units in these programs.

These programs include:

•	 Low Income Housing Tax Credit. This tax credit program subsidizes the capital

costs of units that will have rents affordable to households with incomes at or

below 60 percent of area median income.

•	 HOME Investment Partnership (HOME). This is a formula grant to states and

local governments that can be used to assist homeowners, first-time homebuyers, or renters. Between 1992 and 2005, HOME produced 240,000 affordable

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

or below 65 percent of area median income, or below local Fair Market Rents,

whichever is less.

•	 Housing Opportunities for Persons with AIDS (HOPWA). HOPWA funds have

been available to state and local governments and non-profits by annual formula

and competitive grants since 1992.Currently, 67,000 low-income households

receive housing assistance which serves as a base for participating in care and

HIV treatment.Assistance is targeted to a special needs population.Grantees

report that 77 percent of recipients have extremely low incomes, and another 16

percent have very low incomes.
—10—

•	 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 developed through these

programs became “project-based Section 8 assisted housing” as deep rental

subsidies were attached to the units. There remain 353,000 units subsidized by

these older programs that do not have deep rental subsidies.

For further detail, see “Programs of HUD, 2006: Major Mortgage, Grant, Assistance

and Regulatory Programs” (HUD 2006a).
—11—

I n c i d e n c e o f W o r s t C a s e N e e d s

Chapter 2. Incidence of Worst Case

Needs for Housing Assistance

Snapshot of Worst Case Needs

In 2005, 5.99 million households, comprising 13.42 million individuals, had worst

case housing needs. Households defined as having worst case needs are renter households whose incomes are no greater than 50 percent of area median income (that is,

“very low income” or VLI) and who do not receive housing assistance, and who have

a severe housing problem known as a “priority” problem.4

HUD recognizes two types of priority

problems: living in severely inadequate

housing,5 or having severe cost burdens

because housing costs exceed 50 percent of

household income. In the case of renters, the

latter means severe rent burdens.6

In Exhibit 2-1, households with worst case

needs are represented by the dark areas

in the first two columns—illustrating that

severe problems do not count as worst case

needs if households have incomes greater

than 50 percent of area median income. By

definition, worst case needs result from the

presence among unassisted renters of both

very low income and severe problems.7

Exhibit 2-1. Worst Case Needs Are Severe Housing 

Problems Experienced by Unassisted 

Very Low-Income Renters, 2005

4 See Appendix B for discussion of the concepts used to define and methods used to estimate worst

case needs. Priority problems initially received the designation because they were conditions that

qualified unassisted households for federal preference in admission to assisted housing programs

between 1988 and 1996. Owner households are excluded from worst case needs because of the

conceptual focus on rental housing. In addition, homeowners have a capital asset and receive

“imputed rent” value for their investment. Housing problems of owner households are summarized in

Table A-1b for comparative purposes.

5 The homeless are omitted from estimates of worst case needs in this and earlier reports because

the American Housing Survey counts only persons in housing units. HUD is assessing the potential

of supplementing future estimates of worst case needs with estimates of persons who experience

homelessness from local Homeless Management Information Systems (HMIS). The first Annual

Homeless Assessment Report, transmitted to Congress in February 2007, offered three months of

HMIS data for an 80-community random sample (HUD 2007). It concluded that between February

1 and April 30 of 2005, there were 334,744 homeless people receiving shelter on an average day and

704,000 receiving shelter sometime during that 3-month period. As the Department collects HMIS

data over longer time periods, its capacity to measure both the size and makeup of the homeless

population will expand dramatically.

6 Rent-to-income ratios are calculated on the basis of gross rent, which is the sum of rent plus

tenant-paid utilities.

7 Note that these estimates identify whether households receive rental assistance on the basis of

survey responses, which are not entirely reliable for determining actual assistance (Shroder 2002).
—12—

Exhibit 2-2 shows how the two severe problems, represented by the smaller ovals,

combine with very low income to constitute worst case housing needs. The large

oval represents the 11.52 million unassisted very low-income renters, of whom 5.53

million are free of either severe problem. The 5.99 million households with worst

case needs are represented by the intersection of the large oval with the smaller ovals.

Although there are a total of 33.95 million renter households, the diagram does not

show the 22.43 million renters who are outside the largest oval because they have

incomes above the very low-income threshold or receive some form of housing

assistance. A significant number of these households—those represented by the overhanging portions of the small ovals—also face severe problems, especially severe

rent burden.8 Among all renters, 8.66 million have one or both severe problems.9

Severe rent burdens. Very low-income

households who have worst case housing

needs in 2005 reported incomes averaging

$10,400 per year, or $868 per month

(see Table A-14). In comparison, their

average gross rent (including utilities) was

$713 monthly. The ratio of the average rent

to average income suggests that the typical

rent burden was 82 percent, substantially

above the 50 percent rent-to-income ratio

that qualifies as worst case need, and higher

than the 76 percent ratio observed in 2003.

Such rent burdens substantially limit the

income that households have available to

spend on other necessities such as adequate

nutrition, medical care, and education.

Among households with worst case needs, 77 percent report extremely low incomes

(that is, less than 30 percent of area median income). Rent burdens are even more

severe for these poorer households than for all very low-income renters with worst

case needs. Extremely low-income (ELI) renters have incomes averaging $7,800

annually or $648 per month, and also pay rents averaging $647. Thus, average gross

rents have reached 100 percent of reported income among extremely low-income

renters with worst case needs.10

Exhibit 2-2. Birds-Eye View of Worst Case 

Housing Needs in 2005

Source: HUD-Office of Policy Development and Research (PD&R) tabulations of 

American Housing Survey data.

8 Among renters who are shown outside the large oval in Exhibit 2-2 because they have either rent

assistance or incomes above the very low-income threshold, there are 0.51 million with severely

inadequate units alone, 2.09 million with severe rent burdens alone, and 0.07 million with both

problems (calculated from Tables A-1a and A-3.)

9 Table A-1 in the appendix provides additional data about households with higher incomes or with

“moderate problems,” which include rent-to-income ratios exceeding 30 percent, less severe physical

inadequacies with units, and overcrowding.

10 The improbability that numerous households are paying every dollar of income for housing suggests that high-rent markets may skew the distribution of rents more than high-income markets skew

the distribution of locality-adjusted income. In addition, measurement error is likely to be a factor.

The American Housing Survey is known to capture about 10 percent less household income for

lower-income households and to count about 10 percent more families in poverty than the American

Community Survey.
—13—

I n c i d e n c e o f W o r s t C a s e N e e d s

Severe rent burden continues to be the dominant cause of worst case needs, as severe

rent burdens alone accounted for 91.3 percent of worst case households in 2005.

Severely inadequate housing. Physical housing problems have declined dramatically in past decades, but have changed little since 2001. In 1978, 9 percent of all

very low-income renters had severely inadequate housing (HUD 2003, A-3). In 2005,

658,000 very low-income renters, or 4.1 percent, had severely inadequate housing.

Severely inadequate housing includes a variety of physical problems related to heating, plumbing, electric, public spaces, or maintenance.

Among worst case households in 2005, 8.7 percent had severely inadequate housing,

of which 50 percent also had severe rent burdens. Only 4.4 percent of worst case

households were in that status based solely on severely inadequate housing.

Recent Changes in Worst Case Needs

The 5.99 million households with worst case needs observed in 2005 represent a

statistically significant increase from the 5.18 million households in 2003 and 5.01

million households in 2001. The rate of increase in worst case needs exceeded the

rate of population growth, so that between 2003 and 2005 the proportion of U.S.

households with worst case needs increased by 0.6 percentage points to 5.5 percent.11

An important cause of the increase in worst case needs since 2001 has been an increase

in the number of very low-income renters. The 14.90 million very low-income renter

households in 2001 increased to 15.66 million in 2003 and 16.07 million in 2005.

A greater proportion of renter households

were categorized as very low-income renters in 2005, 47.3 percent, compared with

44.2 percent in 2001. Many higher-income

renters became homeowners during the

2001–2005 period. As a result, there were

1.77 million fewer renter households with

incomes exceeding 80 percent of area

median in 2005 as there were 4 years earlier.

In addition, the incidence of worst case needs among very low-income renters

increased to 37.3 percent in 2005, reversing a slight decrease from 33.6 percent in

2001 to 33.1 percent in 2003. The balance of this chapter examines this phenomenon

in greater detail and identifies some contributing factors.

Exhibit 2-3. The Incidence of Worst Case Needs Increased 

Among U.S. Households From 2001–2005

2001 2003 2005

All households (in millions) 105.44 105.87 108.90

Renter households with worst case 

needs (in millions)

5.01 5.18 5.99

Worst case needs as percent of all 

households

4.76% 4.89% 5.50%

Source: HUD-PD&R tabulations of American Housing Survey data.

11 The change in incidence is statistically significant. The standard error of the difference was

estimated using a “heteroskedasticity-robust” method (the Stata statistical software’s “cluster”

option) to account for the correlation of AHS-sampled housing units from year to year, and increased

by 4 percent to better reflect the complex sample design. The observed 2003–2005 change in worst

case needs incidence of 0.0061 exceeds the resulting standard error of 0.0015 by a factor of 4.07,

thus surpassing the 1.96 ratio that defines the 95 percent confidence interval.
—14—

Factors Affecting Worst Case Needs

Among all U.S. households, the proportion that has worst case housing needs

remained stable through the 1990s, with the minimum level of 4.73 percent observed

in 1999 (HUD 2003). Since then, worst case needs have increased to 5.5 percent of

households in 2005.

Exhibit 2-4 shows that there were 1.15 million more households with worst case

needs in 2005 than in 1991. The 23.8 percent increase exceeded the 14.8 percent

increase in very low-income renters and the 16.9 percent increase in total U.S. households during the same period. As a result,

52.0 percent of unassisted very low-income

renters had worst case needs in 2005,

significantly higher than the 45.4 percent

in 2003, and more comparable to the 51.0

percent incidence observed in 1997.

As the definition of worst case needs suggests, the level of such needs is dependent

on numerous factors. The balance of this

chapter will examine these factors, including household characteristics and income,

and geographic factors affecting housing

supply, and assess their relative importance

in the levels and changes in severe housing

problems observed in 2005.

Importance of Income

The incidence of worst case needs is substantially higher among extremely low-income renters, who have incomes no greater than 30 percent of area median income,

than among very low-income renters. Because severe rent burden—not inadequate

housing—is the predominant cause of worst case needs among very low-income

renters, the importance of income for households seeking affordable housing cannot

be overstated.

As incomes decrease, the pool of rental units that households find affordable

becomes progressively smaller. The 2005 AHS data reveal 7.34 million renter households who had incomes below $10,000, but only 2.28 million rental units that were

affordable to these households based on 30 percent of a $10,000 income (Census

Bureau 2006, Table 2-19).

There also were 2.13 million occupied units with “no cash rent” in 2005, suggesting

that a significant number of households have special housing arrangements. Such

arrangements may include housing provided both as non-wage compensation for

work and as in-kind assistance from families or charities. It is likely that non-wage

compensation in the form of “workforce housing” accounts for a significant proporExhibit 2-4. Overall Trend in the Number of Very Low-Income 

Renters and Those with Worst Case Needs, 1991–2005
—15—

I n c i d e n c e o f W o r s t C a s e N e e d s

tion of no-cash-rent households, as the median income of such households was

$18,024 in 2005 (Census Bureau 2006, Table 2-21)—substantially higher than the

$10,400 income of the mean household with worst-case needs.

Effect of Income on Incidence of Worst Case Needs

Most worst case needs are experienced by extremely low-income renters. By

definition, worst case needs households must have very low income, but households

with extremely low incomes are much more likely than very low-income households

overall to have worst case needs. In 2005, extremely low-income renters accounted

for 77 percent of worst case needs—a proportion that has been stable since 1997.

This is disproportionate to their 61 percent share of households below the very lowincome threshold.

Exhibit 2-5 illustrates that among unassisted extremely low-income renters, the

incidence of the severe problems constituting worst case needs was 72.1 percent

in 2005. Incidence of severe problems, at 26.6 percent, is substantially lower for

the remaining households making up worst case needs—those with incomes from

30–50 percent of median. Among unassisted renters above the very low-income

threshold, only 5.5 percent had severe housing problems. Nevertheless, because very

low-income households account for 42.0 percent of unassisted renters, the overall

proportion of unassisted renters with severe problems was 25.0 percent.

Exhibit 2-5 also shows that

incidence of severe problems increased, at least marginally, among

unassisted renters of every income

group during the 2003–2005 period. The incidence of worst case

needs increased by 6.4 percentage

points for extremely low-income

households and by 4.5 points for

other very low-income households.

Among renters with higher

incomes, the average incidence

of severe problems increased by

1.0 percentage point.

Housing assistance mitigates the 

effect of very low income. By

definition, families with housing assistance do not have worst case needs. Housing

assistance from various sources plays a substantial role in reducing worst case housing

needs. Among the 6.55 million12 renter households who received housing assistance

Exhibit 2-5. Changes in Incidence of Severe Housing 

Problems Are Greatest Among Unassisted Renters 

with the Lowest Incomes, 2003–2005

12 The 6.55 million figure are renters who report conditions implying receipt of housing assistance

in the AHS, as described in the Appendix. This tally substantially exceeds the 4.4 million assisted in

HUD rental programs. Causes of the difference include inaccurate survey responses and inclusion of

less deeply targeted programs like the Low Income Housing Tax Credit.
—16—

in 2005, 69.5 percent had incomes below the very low-income threshold. There were

3.29 million assisted households with extremely low incomes, and another 1.26 million

assisted households with incomes that are very low. Thus, more than half of assisted

households had the extremely low incomes that would place them at a very substantial risk of experiencing worst case housing needs if they had no assistance.

Working Households with Worst Case Needs 

Almost one-third (31 percent) of households with worst case needs presumptively

would not be expected to be working because of age or disability. (These household

types are discussed further below.) For households that do not face either of these

presumed barriers to work, their work participation and housing problems are issues

of substantial policy interest. Numerous federal and state policies and programs

focus on helping citizens by promoting their long-term self-sufficiency and material

progress while providing short-term assistance for daily needs.

Extremely low-income renters with significant work participation 

The AHS does not directly measure work participation. However, by using a proxy

measure, HUD estimates that during 2005 about 1.61 million renter households with

extremely low incomes (16.5 percent of extremely low-income renters) had earnings

consistent with full-time employment.13 Of these working households, 770,000

(48 percent) had worst case housing needs.

A more inclusive proxy for working households counts those whose earnings are

their primary source of income.14 Based on this measure, the number of working

extremely low-income renters was 3.88 million in 2005. Of these, 2.28 million or 59

percent had a severe housing problem causing worst case needs.

These statistics show that affordable housing is a substantial problem for the nation’s

extremely low-income workforce. The picture is somewhat better for renters with

incomes between 30 percent and 50 percent of area median income. Among these

households, 73 percent were working under the full-time employment proxy and 74

percent were counted as working using the indicator of wages being their primary

income source. Among the latter group, 19 percent, or 890,000 households, had

worst case needs in 2005.

Worst case needs among families with children and earnings 

Among households with children and worst case needs, the proportion who were

working full time according to HUD’s proxy was 39 percent in 2005, changed only

slightly from 40 percent in 1999. Using the same measure, about 1.14 million ex13 HUD’s proxy for full-time employment is household earned income of $10,300, equivalent to 40

hours per week for 50 weeks at the national minimum wage of $5.15.

14 “Primary source of income” means their earnings represent 50 percent or more of household

income.
—17—

I n c i d e n c e o f W o r s t C a s e N e e d s

tremely low-income renter households with children (30 percent) were working full

time in 2005. Of these working households, 510,000 had worst case housing needs.15

Demographic Factors Affecting Worst Case Needs

Race and Ethnicity

Worst case needs for housing cut across lines of race and ethnicity. Minority status

depends on definitions that are fluctuating as the nation’s population becomes more

diverse.16 Analyzing housing needs in terms of these demographics shows that

increases in worst case needs occurred among all three of the large racial and ethnic

groups studied.

In 2005, there were 3.10 million non-Hispanic white households with worst case

needs, an increase of 340,000 households (or 12.3 percent); 1.34 million non-Hispanic black households with worst case needs, up 296,000 households (or 28.4 percent); and 1.17 million Hispanic households with worst case needs, up 133,000

households (or 12.8 percent). Exhibit 2-6 adds greater detail to these findings.

Almost all of the increases can be attributed

to an increased likelihood or incidence of

worst case needs among very low-income

renters. Incidence for non-Hispanic whites

increased from 35.8 percent in 2003 to

39.2 percent in 2005. During the same period, incidence likewise rose from 27.7 percent to 33.5 percent for non-Hispanic black

households, and from 31.7 percent to 36.9

percent for Hispanic households. Thus,

increases in the number of worst case needs

as well as the incidence of worst case needs

occurred for each of these populations.

(For further detail, see Table A-9 in the

Appendix.)

The growth in the overall number of very low-income renters did contribute

somewhat to the increase in worst case needs. In 2005, very low-income renters

included 205,000 (2.7 percent) more non-Hispanic white households and 239,000

15 Low-income working families with children are eligible to receive a cash benefit through the

federal Earned Income Tax Credit. The AHS does not capture this form of income. Berube (2006)

reports that the average claimant in 2004 received roughly $1,800, or more than 10 percent of his or her

annual income, from the federal credit, and that nineteen states plus the District of Columbia offer

their own earned income tax credits, matching the federal credit at rates ranging from 5–35 percent.

16 Beginning in 2003, the AHS used revised Census Bureau categories of race and ethnicity that are

not directly comparable with prior surveys. Survey respondents now are allowed to select more than

one racial group, causing small but significant decreases in the size of the single-race categories.

Exhibit 2-6. Major Racial/Ethnic Groups Each Experienced 

Increases in Worst Case Needs, 2003–2005
—18—

(6.4 percent) more non-Hispanic black households than in 2003. For both of these

groups, this overall growth contributed to about one-fifth of the increase in worst

case needs, with the rest of the increase attributable to higher incidence. In contrast,

the number of Hispanic very low-income renters declined by 93,000 (2.9 percent),

following an increase of 31 percent in the 2001–2003 period. This distinction implies

that increases in worst case needs among Hispanics during the 2003–2005 period can

be attributed to factors affecting incidence.

Severely inadequate housing also varies by demographic group. Focusing again

on very low-income renters, only 3.9 percent of non-Hispanic whites experienced

severe physical problems with their units in 2005, compared with 4.5 percent of

non-Hispanic blacks and 4.8 percent of Hispanics. Among very low-income renters

with severe problems, 8 percent of whites, 9 percent of blacks, and 10 percent of

Hispanics lived in severely inadequate housing.

New analysis of the impact of immigration status on worst case needs in 2005

revealed that severe housing needs are largely independent of immigration factors.

Householders who are naturalized citizens accounted for 5.7 percent of worst

case needs, proportional to their 5.1 percent share of unassisted very low-income

households. Likewise, non-citizen householders constituted 13.0 percent of worst

case needs, slightly less than their 14.1 percent share of unassisted very low-income

households. As a result, household status as a citizen, naturalized citizen, or noncitizen has no bearing on whether they are likely to experience worst case needs.

Household Structure 

The composition of different households reflects variations in their stage of life, their

income and resources, and their housing requirements. To explore these differences,

Exhibit 2-7 shows how the number of very low-income renters of three household

structures relates to changes in worst case needs for each group between 2003 and 2005.

Families with Children

In 2005, 6.465 million very low-income

renter households included one or more

children under 18 years of age, and

2.324 million of these households had worst

case housing needs. The resulting incidence

of 35.9 percent is significantly higher than

the 29.0 percent rate in 2003, and accounts

for most of the increase of 475,000 worst

case needs among families with children.

Families with children represented more

than one-third (38.8 percent) of households

with worst case needs in 2005.

Exhibit 2-7. Household Type and Worst Case Needs, 

2003–2005
—19—

I n c i d e n c e o f W o r s t C a s e N e e d s

Another substantial fraction of very low-income renters with children, 27.7 percent, have

rental assistance, which keeps these 1.79 million households out of worst case status.

Elderly Households

HUD defines elderly households as those with either a head or spouse at least 62

years of age. Elderly households constituted 1.291 million, or 21.5 percent, of the

worst case needs in 2005. The number with worst case needs in 2005 was 14.3 percent greater than the 2003 level.

Exhibit 2-7 also shows that during the same period, the number of elderly very lowincome renters increased by 9.6 percent, to 3.587 million. The increase in the number

of very low-income renters who are elderly thus accounts for much of the increase in

elderly worst case needs. Nevertheless, the incidence of worst case needs among the

elderly also increased by 1.5 percentage points to 36.0 percent in 2005, although the

change is not statistically significant.

In 2005, 1.36 million elderly households reported receiving housing assistance,

representing 37.9 percent of elderly very low-income renters. This is a statistically

insignificant increase from the 34.5 percent that received assistance in 2003, and is

about the same as the proportion of elderly very low-income renters that had worst

case needs.

Other Households

The final household category shown in Exhibit 2-7 consists of renters who neither

are elderly nor have children in the household. This group may be further broken

down, as shown in appendix Table A-6a, into other families (that is, related persons

without children), households having persons with disabilities, and other non-family

households.

HUD’s proxy measure for non-elderly renters with disabilities reveals 542,000 worst

case households in 2005, up from 511,000

in 2003 (see discussion of the disability

proxy in the Appendix). Based on this measure, 1.416 million very low-income renter

households have members with disabilities,

which puts the incidence of worst case needs

at 38.3 percent among this group, slightly

higher than the 36.4 percent rate in 2003.

A new examination of “other non-family”

households, shown in Exhibit 2-8, sheds

light on the substantial number of such

households who have worst case needs. Out

of 3.058 million unassisted very low-income

renters of this type during 2005, 1.511 million,

or 49.4 percent, had worst case needs.

Exhibit 2-8. Unassisted Very Low-Income “Other NonFamily” Renters by Household Structure and Presence

of Worst Case Needs, 2005

Living

Alone

With Unrelated Persons

Total

(1) (2 or more)

Total Households 

(1000)

2,452 510 96 3,058

Male Householder 1,316 290 60 1,666

Female Householder 1,137 221 37 1,395

With Worst Case 

Needs (1000)

1,179 273 60 1,511

Male Householder 637 128 43 808

Female Householder 542 145 17 704

Source: HUD-PD&R tabulations of AHS data.

Note: “Other Non-Family” means households with a single non-elderly person living 

alone or only with non-relatives, and not reporting any Supplemental Security Income 

that suggests the presence of a person with a disability. See Table A-6a.
—20—

Most “other non-family” households consist of a single person living alone:

80.2 percent of male-headed households and 78.0 percent of female-headed households. Of these single persons, 1.179 million had worst case needs, with incidence of

48.4 percent among males and 47.7 percent among females. In sum, almost one-fifth,

19.7 percent, of households with worst case needs consist of a single person.

Geographic Variation in Worst Case Needs

The population susceptible to worst case needs, very low-income renters, expanded

across most of the country between 2003 and 2005. The greatest percentage increase,

4.6 percent, occurred in the West as 167,000 very low-income renters were added.

Increases of 2.8 percent in both the South and the Northeast added 150,000 and

94,000 very low-income renters, respectively, while the number in the Midwest did

not change significantly. The South is the most populous region and 34 percent of

very low-income renters accordingly reside there. The other three regions each have

between 21–24 percent of very low-income renters.

Worst Case Needs by Region

Exhibit 2-9 shows that very low-income renters in all major regions—Northeast,

Midwest, South, and West—had high levels of worst case needs in 2005. In the

West, 39.9 percent of very low-income renters had worst case needs. Incidence was

38.3 percent in the Northeast and 36.5 percent in the South. The Midwest had the

lowest incidence, yet in this region too, more than one-third of very low-income

renters, 34.6 percent, had worst case needs.

The greater prevalence of worst case needs

in the West and the Northeast reflects the

higher housing costs in those regions. However, it is notable that regional disparities in

incidence decreased during the 2003–2005

period from 7.9 to 5.3 percentage points.

This leveling resulted from increases in

incidence of 4.3 points in the Midwest and

5.4 points in the South, compared with a

statistically insignificant 1.4 point gain in

the West.

Between 2003–2005, the number of households with worst case needs increased by

18 percent in the Northeast, by 14 percent

in the Midwest, by 20 percent in the South,

and by 9 percent in the West. Because the

South already had the greatest number of

households with worst case needs in 2003,

the greater percentage change in that region

had a larger impact on the national total.

Exhibit 2-9. Worst Case Needs by Region

2001 2003 2005

Northeast

Very low-income renters (1000) 3,446 3,444 3,538

Worst case needs 1,146 1,354

Percent with worst case needs 33.2% 33.3% 38.3%

Midwest

Very low-income renters (1000) 3,005 3,327 3,331

Worst case needs 1,009 1,152

Percent with worst case needs 30.5% 30.3% 34.6%

South

Very low-income renters (1000) 4,860 5,294 5,444

Worst case needs 1,649 1,987

Percent with worst case needs 32.9% 31.1% 36.5%

West

Very low-income renters (1000) 3,592 3,592 3,759

Worst case needs 1,371 1,500

Percent with worst case needs 37.7% 38.2% 39.9%

Source: HUD-PD&R tabulations of AHS data.
—21—

I n c i d e n c e o f W o r s t C a s e N e e d s

Regional Variation in Housing Assistance

Housing assistance, which directly reduces

the incidence of worst case needs, is distributed unevenly across the nation relative to

the population most likely to need it. This

occurs primarily because of differences in

the historical allocation of federal assistance

that are sustained through successive congressional appropriations. Public housing

and subsidized private multifamily housing

constitute about 60 percent of HUD-assisted

housing. These project-based programs

represent geographically fixed investments.

Few public housing developments have

been constructed in recent decades,17 which

makes it proportionately scarcer in highgrowth areas such as the West.

Exhibit 2-10 shows that in comparison to

other regions, the West continues to have

a lower proportion of very low-income

renters who receive housing assistance,

25.5 percent, which necessarily increases its

incidence of worst case needs. However, the

Northeast continues to provide housing assistance to a substantially higher proportion

of very low-income renters than do other

regions while experiencing similarly high

incidence of worst case needs.

Regional Housing Markets

Worst case needs is an indicator of the

balance between supply and demand of

rental housing across local markets. Another

more widely recognized indicator is the

rental vacancy rate. Exhibit 2-11 contrasts

the rental vacancy rate with the incidence of

worst case needs on a regional basis. In this

exhibit, the incidence of worst case needs

is measured as a percentage of very lowincome renters who do not receive rental

assistance, as such renters are more reliant

on market-rate housing.

Exhibit 2-10. Worst Case Needs

and Housing Assistance, by Region

2001 2003 2005

Northeast

VLI renters (1000) 3,446 3,444 3,538

Percent with housing assistance 33.8% 32.3% 34.3%

Percent with worst case needs 33.2% 33.3% 38.3%

Midwest

VLI renters (1000) 3,005 3,327 3,331

Percent with housing assistance 30.8% 28.6% 29.1%

Percent with worst case needs 30.5% 30.3% 34.6%

South

VLI renters (1000) 4,860 5,294 5,444

Percent with housing assistance 26.0% 25.1% 25.9%

Percent with worst case needs 32.9% 31.1% 36.5%

West

VLI renters (1000) 3,592 3,592 3,759

Percent with housing assistance 24.4% 24.1% 25.5%

Percent with worst case needs 37.7% 38.2% 39.9%

Source: HUD-PD&R tabulations of AHS data.

Exhibit 2-11. Regional Variation in Worst Case Needs 

Mirrors Regional Vacancy Rates, 2001–2005 

2001 2003 2005

Northeast

Rental vacancy rates 5.3% 6.6% 6.5%

Worst case needs as percent of 

unassisted VLI renters

50% 49% 58%

Midwest

Rental vacancy rates 9.7% 10.8% 12.6%

Worst case needs as percent of 

unassisted VLI renters

44% 42% 49%

South

Rental vacancy rates 11.1% 12.5% 11.8%

Worst case needs as percent of 

unassisted VLI renters

46% 42% 49%

West

Rental vacancy rates 6.2% 7.7% 7.3%

Worst case needs as percent of 

unassisted VLI renters

50% 50% 54%

Source: HUD-PD&R tabulations of AHS data, and “U.S. Housing Market Conditions,” 

Historical Tables: Table 26 (HUD 2006b).

17 HUD has not provided new funding for public housing development since FY 1994. However,

public housing authorities could use Modernization and HOPE VI funding flexibly for development. 

See http://www.hud.gov/progdesc/pdev.cfm (accessed April 2005).
—22—

The shortage of affordable rental housing, reflected in worst case needs, is shown to

have persisted despite relatively high vacancy rates that averaged 9.8 percent in 2005.

In comparison, vacancy rates remained below 8 percent during most of the 1990s.

Vacancy rates in the Northeast and West, where worst case needs were greatest,

continued to remain substantially below the national average.

The association between regional vacancy rates and worst case needs points to

the importance of the market supply of rental housing, a topic we return to in this

chapter and in greater detail in Chapter 4. Yet despite the clear role that tight rental

markets play in increasing worst case needs, Exhibit 2-11 also shows that other

factors are at work. For example, the increased incidence of worst case needs in the

Midwest during the 2003–2005 period occurred while increased vacancies should

have made rental units easier to find overall.

Worst Case Needs by Urban Geography

The location of very low-income renters in terms of metropolitan status also shows

that worst case needs are distributed not only across all regions of the country but

also throughout all metro-types: central cities, suburbs, and non-metropolitan areas.

Central cities had 2.91 million households with worst case needs in 2005, up 14.9

percent from 2003 levels. Suburbs had 2.09 million households with worst case

needs, up 5.3 percent, while non-metropolitan areas had 0.99 million households

with worst case needs, up 51 percent from the 2003 level. These tallies reflect the

distribution of very low-income renters, of which 47 percent were living in central

cities, 33 percent were in suburbs, and 20 percent resided in non-metropolitan areas

during 2005.

Very low-income renters in all types of metro areas had substantial likelihood of

being worst case needs renters. In both central cities and suburbs, 39 percent of very

low-income renters were in the worst case needs group. While non-metropolitan

area renters had a lower likelihood, almost one-third (32 percent) were also in this

group. Just as significantly, all three metro types saw increases in this likelihood over

the 2003–2005 period. In central cities, the incidence rose from 34 to 39 percent,

and in the suburbs from 36 to 39 percent. In non-metropolitan areas, the incidence

increased from 25 to 32 percent, showing that very low-income renters’ likelihood of

being in the worst case needs group went up from one-fourth to almost one-third of

all such renters.

Exhibit 2-12 illustrates that housing assistance is slightly less common in suburban

areas, where 25.2 percent of very low-income renters were assisted, compared with

29.8 percent receiving assistance in central cities and 30.1 percent in non-metropolitan areas. Moreover, very low-income renters in rural areas continue to experience

substantially lower incidence of worst case needs, at 31.5 percent, than the 38.8

percent in cities and the 38.6 percent in suburbs.
—23—

I n c i d e n c e o f W o r s t C a s e N e e d s

Nevertheless, during the 2003–2005 period,

the incidence of worst case needs increased

for each of the three geographies, with statistically significant increases of 4.9 percentage

points in central cities and 7.0 points in

non-metropolitan areas, and an insignificant

increase of 2.5 points in suburbs. Numbers

of very low-income renters were fairly stable

in cities and suburbs, but the 17 percent

increase in very low-income renters in nonmetropolitan areas (after a 9 percent increase

during the 2001–2003 period) interacted

with the relatively large change in incidence

within those areas.

As a result, the number of worst case

needs in non-metropolitan areas increased

by 334,000 since 2003, exceeding the increase of 105,000 in suburban areas, and

nearly equaling the increase of 377,000 in the much more populous central cities.

See Appendix Table A-11 for these and additional data on variations of need by

metropolitan location.

Another geographic aspect of worst case housing needs has to do with the neighborhoods in which households live. Very low-income renters may choose to pay higher

rents rather than live in neighborhoods suffering from socioeconomic distress.

Chapter 5 presents new analysis of the interaction of neighborhood conditions with

worst case needs.

Markets and Economic Factors

The previous discussion highlighted the importance of income in relation to rents of

units available in local markets. Affordable rental units frequently are occupied by

higher income households. To illustrate, the columns of Exhibit 2-13 show occupied

rental units distributed by the level of income (relative to area median) at which they

were affordable in 2005.18

Summing the first three columns shows an estimated 6.75 million rental units

affordable to extremely low-income renters, compared with 9.73 million extremely

Exhibit 2-12. Worst Case Needs and Housing Assistance 

in Central Cities, Suburbs, and Non-Metro Areas 

2001 2003 2005

Central Cities

VLI renters (1000) 7,287 7,446 7,505

Percent with housing assistance 29.8% 28.1% 29.8%

Percent with worst case needs 34.6% 33.9% 38.8%

Suburbs

VLI renters (1000) 5,147 5,506 5,417

Percent with housing assistance 25.3% 24.3% 25.2%

Percent with worst case needs 34.9% 36.1% 38.6%

Non-Metropolitan Areas

VLI renters (1000) 2,470 2,685 3,149

Percent with housing assistance 30.8% 30.7% 30.1%

Percent with worst case needs 28.3% 24.5% 31.5%

Source: HUD-PD&R tabulations of AHS data.

18 Note that the column for each unit affordability category is identified by the income level, as

percent of area median income, that is necessary to afford the highest-rent unit in the group. (Affordability means the rent does not exceed 30 percent of monthly family income.) In other words,

not every household in an income segment will be able to afford every unit classified as affordable

for their segment. For example, a household with income between 20–29 percent of AMI would

not find a unit “affordable” if rented at 30 percent of 30 percent (in other words, 9 percent) of AMI,

which defines the most costly units affordable to any extremely low-income renter. The supporting

data for this chart are presented in Appendix Table A-12.
—24—

low-income renters. The first five columns

represent 19.12 million very low-income

units, compared with 16.07 million very

low-income renters. Compared with the

2003 housing stock, the number of affordable units has decreased by 4.9 percent

for extremely low-income renters and by

4.2 percent for very low-income renters.

Within each column of Exhibit 2-13 are

“income segments” that show the relative

incomes of the households who live in those

units. (To facilitate comparisons, income

segments in this exhibit exclude the subsets

of households with lower incomes that

ordinarily are included.)

Examining the segments of each column reveals that a substantial number of units

were unavailable to the income groups that would most benefit from their affordability because households with higher relative incomes occupy them. The upper income

segments in the first three “unit affordability” categories show that during 2005 about

2.76 million households with incomes above the extremely low-income threshold

were living in units affordable to extremely low-income renters.19 This displacement

figure is 10.9 percent smaller than the 3.10 million extremely low-income units occupied by similar households in 2003.

Similarly, 4.89 million households with incomes above the very low-income

threshold were living in units affordable at 30–50 percent of median income. This

displacement is 7.9 percent less than the 5.31 million units occupied by better-off

households in 2003.

Reductions in displacement ordinarily would be expected to reduce worst case needs,

yet worst case needs increased while displacement decreased. This apparent inconsistency can be explained by the increase in very low-income renters, which resulted

from growth of the extremely low-income subset between 2003 and 2005. Their

greater number made them a more effective competitive force, in the aggregate, for

the diminished supply of affordable or nearly affordable units that became available.

Despite their apparent success, as a group, in reducing displacement, there were

many individual renters with extremely low incomes that began experiencing severe

housing problems because of the increasingly tight market conditions.

Exhibit 2-13. Affordable Rental Units Frequently Are Occupied 

by Higher Income Households, 2005

19 The data presented in Exhibit 2-13 and Table A-12 include no-cash-rent units as part of the most

affordable rent category, 10 percent of AMI. Including these units and their occupants increases

the proportion of the units affordable at extremely low incomes that are occupied by extremely

low-income households and correspondingly decreases estimates of displacement by higher-income

households. These differences are apparent in comparison with the “available” units estimates

presented in the supply analysis of Chapter 4.
—25—

I n c i d e n c e o f W o r s t C a s e N e e d s

The marked difference in the heights of the third and fourth columns of Exhibit 2-13

shows that there continue to be almost twice as many units in the 40 percent affordability category (4.47 million) as in the 30 percent category (2.26 million). This

difference reflects the challenge the market faces in providing standard-quality rental

housing that is affordable to extremely low-income renters.

Affordability of Units that Became Vacant during 2003–2005

The challenge of supplying affordable housing is also reflected in the fact that most

of the nation’s vacant units become available at rents affordable only above 40

percent of median income. Only 400,000 vacant units—represented in Exhibit 2-13

by the lowest segments of the first three columns—were available for rents that extremely low-income households can afford. These available units totaled 13 percent

less than they did in 2003.

The AHS data reveal a statistically

insignificant net increase of 11,000 vacant

rental units during the 2003–2005 period.

However, the distribution of the rents that

landlords were asking also shifted. Exhibit

2-14 shows which rent categories added

vacant units and which categories lost

units.20 A substantial number of higher income renters became homeowners between

2003 and 2005, which increased slack in the

upper end of the rental market. As a result,

most units that came on the market during

this period were renting for low- to moderate-income levels, and were not affordable

to very low-income renters.

The sum of the first five columns shows that in 2005 there were about 101,000 fewer

vacant units available for rents affordable at no more than the very low-income

threshold. Although the relationship is not direct, the reduction in vacant units

affordable at very low incomes was about one-eighth of the total increase of 817,000

households with worst case needs. Further, such a substantial reduction of the supply

while demand was increasing typically would increase market rents.

A corroborating piece of evidence is that the number of very low-income renters living in units with severe physical problems increased by 7.2 percent, from 614,000 in

2003 to 658,000 in 2005. This exceeds the 2.6 percent increase in the number of very

low-income renters, and suggests that the tighter market may have forced additional

households to accept inadequate units.

20 Note that the limitations discussed in connection with Exhibit 2-13 also apply to Exhibit 2-14.

Exhibit 2-14. Small Net Increase in Vacant Rental Units 

Conceals Losses of Units Affordable to Very Low-Income 

Renters, 2003–2005
—26—

In addition, it is worth remembering that the 2005 AHS data were collected before

hurricanes Katrina and Rita struck in late 2005, and therefore do not reflect the sudden demand for affordable housing that resulted from those disasters.

The issue of affordable housing supply is explored in greater detail in Chapter 4.

Economic Factors Increasing Worst Case Needs

In this chapter, it has been shown that between 2003 and 2005 there has been a

statistically significant increase in both the number of households with worst case

needs and the incidence of worst case needs among the very low-income renters who

are liable to experience these problems. Increases in worst case needs span across

national regions, across metropolitan classifications, and across household types.

In this section, we use other data sources to examine the general economy and trends

in poverty and income that help explain worst case needs. We also consider what the

AHS data reveal about trends in rents and income.

National Trend in Poverty and Income 

While the economic recovery has had positive effects such as reduced unemployment, not all income groups have seen commensurate increases in income. Exhibit

2-15 shows that there are strong similarities between trends in national poverty rates,

both for persons and for families, and trends in extremely low income households

(HUD’s income category closest to family poverty) and in worst case needs. Each

of the measures improved by decreasing slightly between 1999 and 2001, then

increased by 0.7–0.9 percentage points sometime during the 2001–2005 period. For

poverty rates, the increases occurred primarily between 2001 and 2003, while the

measures based on the AHS showed the greatest changes between 2003 and 2005.

In sum, it is apparent that increases in the number and proportion of households with

incomes below the poverty line or below the extremely low-income threshold have

contributed to increases in worst case housing needs.

Exhibit 2-15. National Poverty Trends Correspond with Worst Case Housing Needs, 1999–2005 

Persons in Poverty Families in Poverty Extremely Low-Income 

Households Worst Case Needs

Number Percent

(persons) Number Percent(persons) Number Percent(families) Number Percent

 2005 36,950 12.6% 7,657 9.9% 9,729 8.9% 5,992 5.7%

 2003 35,861 12.5% 7,607 10.0% 9,077 8.6% 5,175 4.9%

 2001 32,907 11.7% 6,813 9.2% 8,659 8.2% 5,014 4.9%

 1999 32,791 11.9% 6,792 9.3% 8,553 8.3% 5,591 5.4%

Source: U.S. Census Bureau: Current Population Survey, Annual Social and Economic Supplements (http://www.census.gov/hhes/www/poverty/

histpov/hstpov13.html); and HUD-PD&R tabulations of AHS data.

Note: Poverty data for 1999 reflect implementation of Census 2000 based population controls.
—27—

I n c i d e n c e o f W o r s t C a s e N e e d s

Changes in Income and Rent of Renter Households

Exhibit 2-16 summarizes what extremely low-income and other very low-income

renters experienced during the 2003–2005 period in terms of average incomes and

average rents. Generally, the increase in worst case needs is due to increased rents

without increased incomes (stable or slight drops in income), and these factors are

more significant for households reporting worst case needs than for other very lowand extremely low-income families.

There was a net increase of 413,000 very

low-income renters during the 2003–2005

period. This includes an increase of 649,000

extremely low-income renters and a

decrease of 236,000 renters with incomes of

30–50 percent of median income.

The average income of households in the

extremely low-income category decreased

only slightly between 2003 and 2005, from

$666 per month to $653 per month. During

the same period, average rents increased by

8.6 percent, from $519 per month to $564

per month. Note that both incomes and rents

are reported in nominal dollars, without

adjustment for inflation.

Among extremely low-income households

with worst case needs, the situation was

worse. Their average decrease in income was larger, from $673 per month down to

$648. In addition, initial 2003 rents were higher, though the 6.5 percent increase by

2005 was smaller, from $607 per month up to $648.

The balance of very low-income renters—those with incomes of 30–50 percent of

median—had a similar experience. While they had a small 2 percent increase in average nominal income, perhaps related to the decrease of renters in this subgroup, their

average rents increased by 9 percent, from $587 to $641 per month.

Components of Gross Rent

Both income groups saw fairly large increases in average gross rent. Because

gross rent includes utilities, it is worth considering whether utility costs changed

significantly during the 2003–2005 period. Exhibit 2-17 shows that for unassisted

very low-income renters, increases in gross rents occurred primarily in contract rents

rather than utilities. Utility costs went up more in percentage terms, but the change in

rent added more in overall dollar terms.

This evidence points to increases in rents rather than utilities as the most important

factor in the increase in numbers and incidence of worst case needs during the

2003–2005 period. Nevertheless, because both contract rents and utility costs are

Exhibit 2-16. 2003–2005 Change in Very Low-Income 

Renters, Income, and Rents, by Relative Income and 

Presence of Worst Case Needs

 Extremely

Low-Income

(0-30% Area

Median Income)

Other Very

Low-Income

(30-50% Area

Median Income)

2003 2005 2003 2005

Renter households 

(thousands)

9,077 9,729 6,581 6,342

Average monthly income $666 $653 $1,706 $1,741

Average monthly gross rent $519 $564 $587 $641

Renter households 

with worst case needs 

(thousands)

3,999 4,643 1,176 1,349

Average monthly income $673 $648 $1,596 $1,624

Average monthly gross rent $607 $647 $879 $935

Source: HUD-PD&R tabulations of AHS data. (See Table A-14 in the Appendix.)
—28—

subject to regional factors, either may have

played a significant role in certain geographic

areas.21

Summary

The estimated number of households with

worst case housing needs increased significantly between 2003 and 2005. The increase

was broadly distributed in terms of both

geographic and demographic factors.

The AHS data show a substantial increase in

U.S. households between 2003 and 2005, but

not in renter households. Indeed, if not for general population growth, the number

of renters probably would have declined during this period. The number of very

low-income renters grew by a somewhat higher amount in comparison to the modest

increase in renters, and the net increase occurred entirely within the extremely lowincome subset.

Very low-income (including extremely low-income) renters constitute the households

“eligible” to experience worst case needs, so their increase was an important cause

of growth in worst case needs during 2003–2005. Their greater number can be explained by flat or declining incomes, especially for the extremely low-income group.

(See the discussion of this issue presented with Exhibit 4-10.)

While it was an important component, the growth in the number of very low-income

renters was not the primary reason for the increase in worst case needs, as the

incidence of worst case needs within this population also increased. The higher

incidence is largely explained by stable or declining incomes, increased rents, and

the overall lack of rental units that are both affordable and available to them—both

in their absolute number and in their prevalence relative to households needing them.

The number of vacant affordable units remains disproportionately low in comparison

to the number of very low-income renters, and decreases in national vacancy rates

during the 2003–2005 period worked against these renters.

Because the number of households seeking very low-income-affordable units

increased while the supply decreased, there was an increase in contract rents. In

addition, increases in utility costs have likely been a significant factor in higher gross

rents for some households. The issue of rental housing supply and rents is covered in

greater detail in Chapter 4.

21 For example, the number of renter households who paid more than $100 per month for natural gas

increased from 965,000 in 2003 to 2.144 million in 2005 (Census Bureau 2005, Table 2-13).

Exhibit 2-17. Unassisted, Very Low-Income Renters

Experienced Increases in Rent and Utilities, 2003–2005

2003 2005 Change 

(dollars)

Change 

(percent)

Contract Rent, Median $500 $545 $45 9.0%

Utility Cost, Median 65 71 6 9.2

Gross Rent, Median 593 635 42 7.1

Contract Rent, Mean $571 $619 $48 8.4%

Utility Cost, Mean 81 91 10 12.3

Gross Rent, Mean 649 717 68 10.5

Source: HUD-PD&R tabulations of AHS data.
—29—

D u r a t i o n o f R e n t B u r d e n

Chapter 3: Duration of Rent Burden

Assessing Dynamics of Rent Burdens

The 2003 “Affordable Housing Needs” report included for the first time an analysis

on duration of rent burdens experienced by low-income families. The analysis was

based on data from the Census Bureau’s Survey of Income and Program Participation

(SIPP).

Conducted for more than 20 years, SIPP is a continuous series of national panel

surveys, in which panels of approximately 14,000–36,700 households are tracked

for 2–1/2 to 4 years.22 SIPP is an important national source of data on income and

characteristics of persons participating in various government programs.

A key part of the SIPP analysis included in the 2003 report used data from 2001 and

2002 to estimate how long renters experienced severe rent burdens and the reasons

why they may have ended a period of rent burden. The results provided compelling

but preliminary evidence that the severity of rent burdens faced by individual verylow-income renters frequently changes markedly and rapidly.

This chapter expands on the 2003 analysis and adds a third year of data (the final

year of the 2001 SIPP panel) to further explore the issue of duration of rent burdens.23 Very low-income households experience housing problems in a dynamic and

evolving way, and understanding that flux is central to an effective public response.

A clearer understanding of the duration, persistence, and recurrence of affordable

housing needs is critical for developing housing policies that use resources most

effectively.

Including a third year of data adds richness to the previously reported results because

it enables analysis of households that cycle from severe rent burden to lesser burdens

and back within 3 consecutive years. However, in some respects, adding a new year

of data adds to the complexity of reaching conclusions on the dynamics of shifting

rent burdens among very low-income renters. As a result, the data reported here

remain exploratory and do not yet support firm conclusions.24

The reader should also note that this section generally refers to “renters” rather

than families or households as in Chapter 2. This is because there is no clear way to

accurately assign or track household rent burden over time when an individual is not

22 See http://www.sipp.census.gov/sipp/overview.html (accessed January 18, 2007).

23 This chapter summarizes significant findings from a working paper written by Census Bureau staff

under contract to HUD (Susin, Scott. Forthcoming 2007. “Duration of Rent Burden as a Measure of

Need,” Cityscape).

24 The methodology for the SIPP analysis included adjustments to make the results more comparable

to HUD’s AHS-based estimates of rent burdens. The AHS is more complete in measuring utility

costs, an important component of gross rent, so SIPP-based utility costs were imputed using regional

AHS-based correction factors. See also footnotes that follow related to Exhibit 3-1.
—30—

part of the same household in both years. Finally, because the SIPP does not collect

data on physical housing conditions, the findings in this chapter relate only to rent

burdens relative to income and not to worst case needs overall.

Exits from Severe Rent Burdens

Exhibit 3-1 examines very low-income renters with a severe rent burden in 2001,

whether their status changed in 2002 or 2003, and the reason for exiting rent burden,

if applicable, during these years. The exhibit shows that 53.3 percent of unassisted

low-income renters who reported a severe rent burden in 2001 continued to have

such a burden in 2002. One year later, in 2003, the proportion who continued to

report such a burden declined further, to 45.2 percent of the renters. (This group

includes some renters, examined in Exhibit 3-5, whose exit from severe rent burdens

during 2002 proved temporary.)

A variety of factors account for the portion

of unassisted very low-income renters who

reported a severe rent burden in 2001 but no

longer fell into this category in 2002 and/or

2003.

About 7 percent (6.8 percent in 2002 and

7.3 percent in 2003) of households who

initially had a severe rent burden obtained

housing assistance (and thus would not be

counted as having worst case needs, which

by definition counts only unassisted renters).

Another group moved into owner-occupied

housing—5.7 percent in 2002, going up

to 10.0 percent by 2003—and thus would

be removed from the category of renters

altogether. Presumably, some of those who

moved to owner-occupied housing continued

to experience high monthly housing costs.

Finally, a small portion, 1.3 percent in 2002

and 1.5 percent in 2003, reported having

either zero or negative incomes in subsequent

years and, consistent with the methodology

in the rest of this report, are excluded from

the worst case needs category.

After subtracting the groups described in

the previous paragraph, 33.1 percent of the original unassisted severe rent burden

group reported moving out from the severe burden category in 2002 either due to

increased income or reduced housing costs. Of these, 8.1 percent experienced a rent

Exhibit 3-1. Status in 2002 and 2003 of Unassisted Very 

Low-Income Renters who had Severe Rent Burdens in 2001

Outcome Categories

Subsequent Outcomes

2002 2003

Remained in Severe Rent Burden 

(rent > 50 percent of income) 53.3% 45.2%

Exited Severe Rent Burden, for reasons below: 46.7% 54.8%

 Rent Decreased 8.1 10.0

 Moved 2.8 3.9

 Stayed 5.3 6.1

 Income Increased 23.3 23.7

 Combination, rent decrease and income 

 increase

1.7 2.3

 Assisted 6.8 7.3

 In owner-occupied housing 5.7 10.0

 Zero or negative incomea 1.3 1.5

Total 100.0% 100.0%

Source: Census tabulations of data from the Survey of Income and Program Participation for 2001, 2002, and 2003.

a

 Because of reporting problems, and consistent with the worst case needs definition, 

households are not counted as having severe rent burdens in subsequent years if their 

incomes become zero or negative. 

Note: Household totals and outcomes differ from those reported in “Affordable Housing Needs” (HUD 2005a) because of new edits to address misreporting of rents in 

SIPP. Households reporting that rent is shared among residents are excluded because 

they often seem confused about whether to report individual contributions or total rent. 

Missing rent values are imputed based on reported rent in surrounding years, if available, and inflation; households with rent missing in all 3 years are excluded. Overall, 19 

percent of the sample were excluded. Because of these edits, as well as sample attrition, 

and possibly other factors, the household counts underestimate the true population by 

about 30 percent.
—31—

D u r a t i o n o f R e n t B u r d e n

decrease, 23.3 percent had an increase in income, and 1.7 percent had a combination

of decreased rent and increased income as the primary reason for their exit from the

severe rent burden category.25

After another year, in 2003, a majority (54.8 percent) of those who initially had

severe rent burdens no longer reported severe burdens or no longer fell into the

category of unassisted renters. Netting out those who began receiving housing

assistance, moved into owner-occupied housing, or began reporting zero or negative

incomes leaves 36.0 percent who escaped severe burdens while continuing to reside

in private rental housing. Of these positive outcomes, 10.0 percent are attributed to a

rent decrease, 23.7 percent to an income increase, and 2.3 percent to a combination

of rent and income changes.

Of the portion that were still unassisted renters, the data show that income changes

are about 2–3 times more likely than rent changes to account for exit from severe

rent burden, and also suggest that vulnerability of very low-income households to

income shocks creates a significant risk for experiencing worst case needs.

Exhibit 3-2 also shows that among the group

of very low-income unassisted renters who

initially had severe rent burdens, 33.1 percent

remained unassisted renters but exited severe

rent burden in 2002. Of the initial group,

24.4 percent achieved their exit by moving

into a “moderate rent burden” status in 2002,

in which they paid less than 50 percent but

still more than 30 percent of their income for

rent. By comparison, only 8.6 percent were

able to reduce their monthly housing costs to

below 30 percent of income. In 2003, these

figures improved somewhat, as 20.7 percent

of householders who initially had severe rent

burdens now had moderate rent burdens, and

another 15.3 percent had rent burdens below

the 30 percent of income threshold.

Exhibit 3-3 shows that of those reporting

a rent decrease as the reason for exiting a

severe rent burden between 2001 and 2002,

Exhibit 3-2. Extent of Burden among Unassisted

 Very Low-Income Renters who Exited Severe Rent Burden 

Outcome Categories

Subsequent Outcomes

2002 2003

Moderate Rent Burden (30–50 percent of income) 24.4% 20.7%

Low Rent Burden (0–30 percent of income) 8.6% 15.3%

Total exiting Severe Rent Burden 33.1% 36.0%

Source: Census tabulations of data from the Survey of Income and Program 

Participation for 2001, 2002, and 2003.

25 The classifications in Exhibit 3-1 are mutually exclusive. That is, renters are classified as having

eliminated their severe rent burdens through a combination of rent decrease and income increase

only if neither the rent nor the income change was enough by itself. If both rent and income changed

by enough that either would eliminate the rent burden by itself, the household was classified as “rent

decreased.”

Exhibit 3-3. Reasons for Rent Decreases among Unassisted 

Very Low-Income Renters who Exited Severe Rent Burden

Outcome Categories

Subsequent Outcomes

2002 2003

Moved to new unit with lower rent 2.8% 3.9%

Stayed in same unit with lower rent 5.3% 6.1%

Total with Rent Decrease 8.1% 10.0%

Source: Census tabulations of data from the Survey of Income and Program Participation for 2001, 2002, and 2003.
—32—

2.8 percent did so as the result of a move to a different rental unit, while 5.3 percent

stayed in the same unit.

The high fraction of “exits in place” would seem to indicate that moving from a

high rent situation was not as important in eliminating a severe rent burden as some

other reason for a decreased rent. Some of the rent decreases for stayers may be due

to utilities, as the gross rents examined here include utilities. However, the number

of renters involved suggests that other factors may be at work, possibly including

reporting errors in the amount of rent or utilities paid in either of the years involved.

Additional Renters with Severe Cost Burdens in Later Years

Exhibit 3-4 examines the group of unassisted renters who had either moderate or low

rent burdens in the 2001 baseline year.

This exhibit shows that a significant number

of renters without a severe rent burden in

2001 subsequently entered that category in

either 2002 or 2003. Of those who initially

had moderate rent burdens, 16.5 percent

had severe burdens in 2003. Of those who

initially had low rent burdens, 9.0 percent

had severe burdens in 2003. Based on an

estimated 3.05 million unassisted very

low-income renters with moderate problems

in 2001,26 increased rent burdens among

the initially moderate-burdened population

thus added 500,000 severe burdens by 2003.

Similarly, an estimated 2.60 million unassisted very low-income renters had low rent

burdens in 2001,27 of which an estimated

230,000 had severe burdens by 2003. These additions totaled 730,000 new renters

with severe burdens in 2003, substantially offsetting the 1.70 million who exited

severe burdens in the same period.28 (Other additions to those with severe burdens

resulted from household formations and income changes that add to the number of

very low-income renters, but are not captured in this analysis.)

Exhibit 3-4. Outcomes in 2002 and 2003 of Unassisted Very 

Low-Income Renters Without Severe Rent Burden in 2001

Initial 

Categories Outcome Categories

Subsequent Outcomes

2002 2003

Moderate Rent 

Burden (30-50% 

of income) 

in 2001

(N=2.537 million)

Severe Rent Burden 17.4% 16.5%

Not Severe Rent Burden* 82.6% 83.5%

 30-50% of income 45.2% 39.3%

 0-30% of income 23.8% 26.0%

Low Rent Burden

(0-30% of income)

in 2001

(N=2.228 million)

Severe Rent Burden 7.4% 9.0%

Not Severe Rent Burden* 92.6% 91.0%

 30-50% of income 11.8% 10.8%

 0-30% of income 60.5% 54.5%

Source: Census tabulations of data from the Survey of Income and Program Participation 

for 2001, 2002, and 2003.

* “Not Severe Rent Burden” includes those renters who later received housing assistance 

or moved to owner-occupied housing.

26 The estimate is based on HUD 2005a, Table A-3, and represents a slight undercount because it

excludes households that had moderate rent burdens in combination with severe physical problems

during 2001.

27 The estimate is based on HUD 2005a, Table A-3, and has limitations like the previous estimate;

households with severe problems or with moderate rent burdens are netted from the total of unassisted very low-income renters during 2001.

28 Based on 4.72 million unassisted very low-income renters with severe rent burdens in 2001 (HUD

2005a, Table A-3) times 36.0 percent from Exhibit 3-2 in this chapter.
—33—

D u r a t i o n o f R e n t B u r d e n

Of the unassisted very low-income renters with a moderate rent burden in 2001, 39.3

percent still had this level of burden in 2003, while 26.0 percent moved to the lowburden category. However, comparing this positive outcome to the 16.5 percent who

had a severe burden by 2003 indicates that about two renters with moderate burdens

will move to severe burdens for every three who reduce their rent burden below the

30 percent of income threshold.

Likewise, even renters with a low rent burden in 2001 ran the risk of having a moderate rent burden (10.8 percent) or a severe rent burden (9.0 percent) by 2003.

Exhibit 3-5 examines temporarily positive

outcomes that may end in severe rent burdens. The table shows the 2003 outcomes of

unassisted very low-income renters who had

severe rent burdens in 2001 and had escaped

severe burdens in 2002.

This exhibit shows that exit from a severe

rent burden is no guarantee that the renter

will not return to that status. About one-fifth

of renters (19.9 percent) who escaped from

a severe rent burden in 2002 reported having

a severe rent burden again in 2003. Of

the remainder, the same proportion had moderate rent burdens as had low burdens

(29.2 percent for each). Not shown in this exhibit are the 14.6 percent who were

themselves homeowners by 2003 and the 3.5 percent who lived with other homeowners.

Summary

The data presented in this chapter, together with the analysis presented in the last

Affordable Housing Needs report (HUD 2005a), present a complex picture of the

housing costs facing very low-income families. The results include a fair amount of

new data about shifting dynamics of rent burdens over time and movement of very

low-income persons among various levels of rent burdens and types of housing status

(for example, renter vs. owner or assisted vs. unassisted). For that reason, the findings should continue to be considered carefully, and additional research is warranted.

Among unassisted very low-income renters who reported a severe rent burden in

2001, a majority (53.3 percent) remained in the same status in 2002. The other

46.7 percent of persons, for a variety of reasons, no longer were unassisted very

low-income renters with severe rent burdens. Of the original group, 24.4 percent

remained unassisted renters but had reduced burdens to the moderate level (paying

30–50 percent of income for rent) and 8.6 percent had reduced burdens to less than

30 percent of income. The balance no longer were unassisted renters, as 6.8 percent

subsequently received housing assistance and 5.7 percent had moved to owner-occupied housing.

Exhibit 3-5. Third-Year Outcome of Unassisted Very LowIncome Renters with Severe Rent Burden in 2001 that was 

Mitigated in 2002

Initial

Categories

Outcome

Categories

Subsequent Outcomes

2002 2003

Severe Rent Burden 

(50%+ of income) in 

2001, changing to 

Moderate or Low Rent 

Burden in 2002

(N=1.114 million)

Severe Rent Burden 0.0% 19.9%

Not Severe Rent Burden 100.0% 80.1%

 30-50% of income — 29.2%

 0-30% of income — 29.2%

Source: Census tabulations of Survey of Income and Program Participation for 2001, 

2002, and 2003.
—34—

The 2001–2002 severe burden exit rate increased modestly, from 46.7 percent to

54.8 percent, when the analysis was extended to 2003. The declining rate of exit

suggests that long periods of severe rent burden also are common. In addition, 20

percent of renters who had reduced their severe rent burdens in the first year resumed

paying more than half of their income for rent in the second year.

The data in this chapter do not contradict other evidence about the substantial need

for affordable housing, because even after 2 years, only 10.0 percent of exits from

severe rent burdens were attributed solely to a rent decrease, and the majority of

those renters remained in the same unit.

In addition, a significant number of renters without a severe rent burden in 2001

subsequently entered that category in either 2002 or 2003. Of those who initially

had moderate rent burdens, 16.5 percent had severe burdens in 2003. Of those who

initially had rent burdens below 30 percent of income, 10.8 percent had moderate

rent burden and 9.0 percent had severe rent burden by 2003.

Clearly, additional research is needed to assess the changing dynamics of housing

costs over time. Additional research using the Census Bureau’s SIPP database and

other sources for information on housing costs over time would be helpful in shedding further light on the dynamics of severe rent burdens.
—35—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

Chapter 4. Availability of

Affordable Housing Stock

Why Housing Supply is An Issue

Most of the analysis in this report focuses on the demand side of the housing

markets: the distribution of households by income and demographic characteristics,

what they can afford to pay for rent, and what they do pay as a proportion of their

incomes. This chapter examines the question of housing supply.29

Affordability, Availability, and Adequacy 

This chapter uses three concepts to assess the rental housing stock, Affordability,

Availability, and Adequacy.

•	 Affordability measures the extent to which there are enough rental housing units

of different costs to provide each household with a unit it can afford (based on

the 30 percent of income standard). Affordability is the broadest measure of

housing stock sufficiency, addressing whether there would be sufficient housing

units if allocated solely on the basis of cost. The affordable stock includes both

vacant and occupied units.

•	 Availability measures the extent to which affordable rental housing units are

available to households within a particular income range. Some households

choose to spend less than 30 percent of their incomes on rent, occupying housing that is affordable to households of lower income. These units are thus not

available to the lower-income households.30 A unit is available at a given level

of income if it is affordable at that level and either 1) occupied by a household

with that income or less or 2) vacant.

•	 Adequacy extends the concept of availability by considering whether sufficient

rental units are physically adequate as well as affordable and available.31

29 More in-depth analysis of the nation’s housing inventory is available from PD&R in the “Components of Inventory Change” and “Rental Dynamics” reports. The reports use AHS data from 1985

onward to examine changing characteristics of individual housing units and their occupants, as well

as units added and removed from the housing stock. The supply of affordable rental housing is a

particular focus of “Rental Market Dynamics: 2003–2005” (Eggers and Moumen, 2007). All reports

are available at http://www.huduser.org/datasets/cinch.html.

30 The availability measure also removes units from consideration if they have artificially low rents

because they are occupied as a benefit of employment (for example, by caretakers) or because they

are owned by relatives or friends of the occupants. The 2005 AHS data indicate that 2.1 million

renter households (6.2 percent) occupied their units while paying no rent. The AHS does not

provide estimates of the number of households paying a positive but below-market rent because of

employment or other reasons.

31 The AHS rates housing units using a three-level measure: adequate, moderately inadequate, and

severely inadequate. For detail, see the entry for the variable ZADEQ in the Codebook for the

American Housing Survey, Public Use File: 1997 and Later (U.S. Department of Housing and

Urban Development 2006).
—36—

Measures of Affordability and Availability

Exhibit 4-1 describes the U.S. rental housing stock in 2005 using data from the

AHS.32 For purposes of this analysis, income and affordability are divided into

intervals representing 5 percent of area median income (AMI).

The point at which the Affordability line

crosses 100 represents the income level at

which there is an affordable rental unit for

every household. This occurs at 45 percent of

AMI, meaning the number of rental housing

units is sufficient—with ideal allocation—to

provide affordable housing to households

with incomes above 45 percent of area

median income. The comparable income

threshold in 2003 was 40 percent of median,

showing a declining trend in affordability

in this period. Affordable units peak at an

income level of 75 percent of AMI. Beyond

this, more households than housing units are

being added. The downward slope beyond

75 percent of AMI represents a reduction in

housing need, because the households with

incomes greater than each successive threshold are more and more likely to spend

less than 30 percent of their incomes on housing.

The Affordable and Available line shows a different story. Its position below and to

the right of the Affordable line indicates that availability is a substantial additional

constraint. For example, the Affordability line indicates that about 68 percent of

households with incomes below 30 percent of AMI could be housed in affordable

units if such units somehow could be perfectly allocated. The 68 percent figure is a

decrease from 78 percent in 2003.

In contrast, the Availability line shows that only 40 percent of these extremely

low-income households could actually find an affordable unit available for their

occupancy even if location were not a factor. A considerable proportion of the most

affordable housing stock is occupied by households who could afford to spend more.

As a result, many units that are affordable to lower-income renters are not available

Exhibit 4-1. Three Measures Characterize the Sufficiency of 

the U.S. Rental Housing Stock, 2005

22 Measures of affordability and availability do not reflect small-scale geographic detail. The results

presented in this chapter reflect large-scale measures that compare the entire housing stock with the

entire rental population. Although this chapter presents more geographically restricted measures

below, they are still too large to fairly represent housing demand and supply as owners and renters

experience them, as these are local phenomena. Thus, these results should be viewed with some

caution as national or regional indicators based on underlying local housing markets. More severe

shortages or generous surpluses can occur in specific housing markets, despite these national and

regional findings. For an overview of issues related to local markets, see Khadduri, Burnett and

Rodda (2003).
—37—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

to them. The affordable stock is nominally sufficient to house every household above

45 percent of AMI, yet the available stock does not match the number of renters

until household incomes reach 70 percent of AMI.33 This 70 percent balance point is

significantly higher than the 65 percent of AMI that sufficed in 2003.

The Adequate line in Exhibit 4-1 shows that excluding physically inadequate units

further reduces the sufficiency of the rental housing stock. Even for renters with low

incomes up to 80 percent of median, only 96 adequate units are available per 100

renters. The adequate stock is not fully sufficient for demand until those units affordable only above 125 percent of AMI are included.

Rental Stock by Income 

As suggested by Exhibit 2-13, there are fewer

affordable units available to households with

the lowest incomes. Exhibit 4-2 illustrates

this by presenting the housing stock measures for the standard income groups used

in this report. There is a mismatch between

the number of extremely low-income renters

and the number of affordable units available

to them. There are only 67.6 affordable

units for every 100 extremely low-income

households. The ratio of available units is

about three-fifths as great, at 39.9 units per

100 households. If physically adequate units

are required, only 35.4 are available per 100

extremely low-income households.34

At the very low income level, there are

enough units overall to house all renters, but

there is a mismatch of available units for this

larger group as well. There are only 77 available units for every 100 very low-income households, and fewer than 68 that are also

physically adequate. At the higher levels of income, the available rental stock is sufficient

to house all renters, though a small proportion of units have physical problems.

The supply of affordable housing stock declined substantially between 2003 and

2005 relative to households who need it. Exhibit 4-3 illustrates the decrease. The

33 This statement interprets the horizontal difference between the Affordable and the Affordable/Available line, which can be understood as showing the income levels of families who are

“displaced” by higher income households. The preceding example reflects the vertical difference

between the lines, which represents the difference between nominal and available supply of affordable units for households of a given income level.

34 Research based on the Residential Finance Survey indicates that 12 percent of units with gross

rents of $400 or less produced negative net operating income, suggesting they are heading for

demolition or conversion to nonresidential use (Joint Center for Housing Studies 2006, 24).

Exhibit 4-2. Rental Housing Stock by Income Category, 2005

Income

Housing Units per 100 Households 

Affordable Affordable and 

Available

Affordable, 

Available, and 

Adequate

ELI (0–30% AMI) 67.6 39.9 35.4

VLI (0–50% AMI) 117.1 76.8 67.9

LI (0–80% AMI) 139.2 106.6 95.6

Source: HUD-PD&R tabulations of AHS data.

Exhibit 4-3. Rental Housing Stock by Income Category, 2005

Housing Units per 100 Households

2003 2005 Difference

Extremely Low Income (0–30% AMI)

Affordable 78.2 67.6 – 10.6

Affordable and Available 44.0 39.9 – 4.1

Very Low Income (0–50% AMI)

Affordable 127.5 117.1 – 10.4

Affordable and Available 81.4 76.7 – 4.6

Source: HUD-PD&R tabulations of AHS data.
—38—

overall supply of affordable units per 100 extremely low-income renters decreased

by more than 10 units, from 78.2 to 67.6. For the same population, the deficiency

in available units decreased by more than 4 units per 100 renters, from 44.0 to 39.9.

Very low-income renters experienced very similar decreases in the stock under both

the affordable measure and the available measure.

Rental Stock by Location

Deficiencies in the affordable and available

stock are less severe in nonmetropolitan

areas, as is illustrated by Exhibit 4-4. The

available stock is larger in nonmetropolitan

areas at all levels of income, reaching the

one-unit-per-household ratio at 56 percent of

AMI, compared with 70 percent of AMI for

cities and suburbs.

The similar profiles of the city and suburb

lines in Exhibit 4-4 show that on average,

central cities and suburbs have about the

same proportion of units available per 100

renters at all income levels.

Exhibit 4-5 summarizes the sufficiency

patterns among cities, suburbs and nonmetropolitan areas. Notably, although cities

and suburbs display comparable availableunit-ratios—with about 36 units per 100

extremely low-income renters and 71–74

units per 100 very low-income renters—the

underlying supply of affordable units is more

constrained in central cities than in suburbs.

The difference between the Affordable and

the Available estimates implies that in cities,

about 32 units that would be affordable at

very low incomes are occupied by higher-income households. Comparable displacement

figures are 42 units in suburbs and 57 units in

non-metropolitan areas.

Exhibit 4-6 examines how affordability ratios

and availability ratios changed across the

metro typology during the 2003–2005 period.

The key finding is that the sufficiency of affordable and available units decreased for

every income level in every category of urbanization.

Exhibit 4-4. Nonmetropolitan Areas Have More Available 

Rental Units than Cities and Suburbs

Exhibit 4-5. Rental Housing Stock by Metropolitan Status 

and Income Class, 2005

Housing Units per 100 Households 

Affordable Affordable 

and Available

Affordable, 

Available, and 

Adequate

Central Cities

ELI (0–30% AMI) 52.2 36.4 31.8

VLI (0–50% AMI) 106.1 74.1 64.1

LI (0–80% AMI) 133.9 106.2 93.6

Suburbs

ELI (0–30% AMI) 66.7 36.1 32.4

VLI (0–50% AMI) 113.9 71.5 64.6

LI (0–80% AMI) 145.3 105.4 96.7

Nonmetropolitan

ELI (0–30% AMI) 106.1 54.5 49.4

VLI (0–50% AMI) 148.9 92.3 82.6

LI (0–80% AMI) 140.9 109.9 98.3

Source: HUD-PD&R tabulations of AHS data.
—39—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

Several of the greatest decreases in available units occurred at income levels that

contribute to worst case housing needs. In

central cities, available units decreased by

11 per 100 extremely low-income renters

and by 17 per 100 very low-income renters.

A similarly large decline of 15 units per 100

very low-income renters occurred in nonmetropolitan areas. Other large decreases

that don’t directly add to worst case needs

occurred in the low-income stock in each

geographic type.

Exhibit 4-7 details the affordable, available,

and physically adequate stock relative to

renter populations in the four regions for

each of the standard income categories.

The West has the greatest mismatch, with

considerably fewer units per 100 households

than the other three regions.

Exhibit 4-6. Trend in Rental Housing Stock, by Metro Status and Income Category, 2003–2005 

Affordable

Housing Units per 100 Households

Affordable and Available

Housing Units per 100 Households

2003 2005 Difference 2003 2005 Difference

Central Cities

ELI (0–30% AMI) 65.6 52.2 – 13.3 43.0 31.8 – 11.2

VLI (0–50% AMI) 120.3 106.1 – 14.2 81.5 64.1 – 17.4

LI (0–80% AMI) 137.4 133.9 – 3.5 107.7 93.6 – 14.1

Suburbs

ELI (0–30% AMI) 74.5 66.7 – 7.8 39.1 32.4 – 6.7

VLI (0–50% AMI) 121.2 113.9 – 7.3 73.3 64.6 – 8.7

LI (0–80% AMI) 149.6 145.3 – 4.3 106.9 96.7 – 10.2

Nonmetropolitan

ELI (0–30% AMI) 121.4 106.1 – 15.3 56.7 49.4 – 7.4

VLI (0–50% AMI) 160.3 148.9 – 11.4 97.6 82.6 – 15.0

LI (0–80% AMI) 155.1 140.9 – 14.3 115.6 98.3 – 17.2

Source: HUD-PD&R tabulations of AHS data.

Exhibit 4-7. Rental Housing Stock by Census Region

and Income Category, 2005

Northeast

ELI (0–30% AMI) 64.6 41.5 37.3

VLI (0–50% AMI) 101.3 68.5 60.2

LI (0–80% AMI) 130.0 98.0 86.7

Midwest

ELI (0–30% AMI) 75.6 42.3 39.0

VLI (0–50% AMI) 150.6 96.5 88.0

LI (0–80% AMI) 146.2 116.9 107.6

South

ELI (0–30% AMI) 69.2 40.2 34.7

VLI (0–50% AMI) 125.9 81.5 71.4

LI (0–80% AMI) 147.5 111.0 99.4

West

ELI (0–30% AMI) 60.7 35.3 31.1

VLI (0–50% AMI) 89.3 60.2 52.2

LI (0–80% AMI) 129.6 99.1 87.5

Source: HUD-PD&R tabulations of AHS data.

Housing Units per 100 Households 

Affordable Affordable 

and Available

Affordable, 

Available, and 

Adequate
—40—

Sufficiency Relative to Fair Market Rent

HUD establishes, for every housing market, a Fair Market Rent (FMR) that is

intended to represent the cost of decent existing housing that is neither new, nor

luxury, nor subsidized.35 The FMR is used in the largest housing assistance program,

Housing Choice Vouchers, to determine the maximum level of subsidy for assisted

households. It is also used in other contexts as an indicator of reasonable housing

costs in a given area. A natural question is whether the stock of housing renting for

less than the FMR is adequate to meet the needs of households who can afford to pay

no more than the FMR.

Exhibit 4-8 illustrates that the rental stock is insufficient using the fair market rent

standard as well. While enough affordable units exist in each region, the number

of available units in each region is sufficient to house only 83–90 percent of the

households who can afford rents no higher than the fair market rent.

Exhibit 4-8. Rental Stock of Below-FMR Units, 2005

Households 

(thousands)

Housing Units (thousands) Housing Units per 100 Households

Affordable Affordable 

and Available

Affordable, 

Available, 

and Adequate

Affordable Affordable 

and Available

Affordable, 

Available, 

and Adequate

All 19,741 24,029 17,104 15,208 121.7 86.6 77.0

Northeast 4,362 5,044 3,637 3,207 115.6 83.4 73.5

Midwest 3,594 4,645 3,192 2,930 129.2 88.8 81.5

South 6,633 8,414 5,915 5,227 126.9 89.2 78.8

West 5,152 5,926 4,360 3,844 115.0 84.6 74.6

City 9,122 10,663 7,933 6,916 116.9 87.0 75.8

Suburb 6,944 8,583 5,874 5,343 123.6 84.6 76.9

Nonmetropolitan 3,674 4,783 3,297 2,949 130.2 89.7 80.3

Source: HUD-PD&R tabulations of AHS data.

Trends in Rental Stock

Through 2003, the availability of the affordable rental stock was relatively stable

for two decades. Exhibit 4-9 shows the

available rental units per 100 households

for the four standard income categories,

over the period 1985–2005.36

35 In general, the Fair Market Rent is the 40th

percentile rent paid by recent movers for standardquality units within each region (HUD 2006c).

36 This figure is based on custom tabulations of the

AHS national datasets, for odd-numbered years in

the period.

Exhibit 4-9. Availability of Affordable Rental Units, 1985–2005
—41—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

Availability turned downward after 2003 for renters of all income groups below

80 percent of AMI. Middle-income renters continued to experience stable supply

during the 2003–2005 period.

Exhibit 4-10 examines the factors responsible for the general decrease in the

availability of affordable units from 2003–2005. The simple explanation is that the

number of households in the categories of interest rose, while the number of affordable and available housing units rose more slowly, or even fell.

However, the income categories are not fixed, depending as they do on AMI. The

exhibit shows that the income limit for each category rose by slightly more than

3 percent between 2003 and 2005.37 Further, AMI is calculated on the basis of all

households, not just renters. The exhibit shows, in contrast, that the median household income for renters did not change during the period.

Exhibit 4-10. Factors Explaining Changes in Rental Housing Availability Rate, 2003–2005

ELI

(0–30% AMI) 

VLI

(0–50% AMI) 

LI

(0–80% AMI) All

Cumulative Households (thousands) 

2003 9,077 15,658 23,118 33,614

2005 9,979 16,324 23,812 33,951

Percent Change + 9.94 + 4.26 + 3.00 + 1.00

Cumulative Affordable & Available Housing Units (thousands) 

2003 3,996 12,740 25,136 37,577

2005 3,982 12,531 25,397 37,924

Percent Change – 0.35 – 1.64 + 1.04 + 0.93

Income Limit (Median, Current Dollars) 

2003 14,350 23,900 38,200 NA

2005 14,804 24,665 39,402 NA

Percent Change + 3.16 + 3.20 + 3.15 NA

Median Household Income (All Renters, Current Dollars) 

2003 — — — 26,000

2005 — — — 26,000

Percent Change — — — —

Median Monthly Housing Cost (All Renters, Current Dollars) 

2003 — — — 631

2005 — — — 672

Percent Change — — — + 6.50

Source: HUD-PD&R tabulations of AHS data.

37 The income limits shown in Exhibit 4-10 differ in several ways from the usually quoted fourperson income limits. First, the exhibit shows the median income limit, adjusted for household size,

and weighted according to the distribution of household sizes in the AHS dataset. Second, the AHS

dataset uses estimates of income limits for housing units outside of large metropolitan areas. See

the documentation files at http://www.huduser.org/datasets/ahs/ahsdata03.html for more information

about the estimation process.
—42—

As a result, relatively more renter households are counted in the lower income

categories in 2005 compared with 2003. Moreover, while the median renter income

remained flat, the median monthly housing cost for rental units rose 6.5 percent.

These data therefore indicate that the relative reduction in the available rental stock

can be attributed to a rising number of households, stagnant household incomes, and

rising monthly housing costs.

Finally, because of the shift of households to lower income categories, the proportion

of resulting rent burdens that count as worst case needs also increased.

38 Crowding is classified as a moderate problem rather than a severe problem.

Exhibit 4-11. Geographic Pattern 

of Crowded Renter Households

Households

(thousands)

Incidence

(percent)

All Renters 1,635 4.8

Metropolitan Status

City 819 5.5

Suburb 600 4.7

Nonmetropolitan 216 3.4

Region

Northeast 318 4.5

Midwest 176 2.7

South 422 3.6

West 718 8.4

Source: HUD-PD&R tabulations of AHS data.

Exhibit 4-12. Household Characteristics 

of Crowded Renter Households

Households

(thousands)

Incidence

(percent)

All Renters 1,635 4.8

Income *

ELI (0–30% AMI) 562 5.8

Other VLI (30-50% AMI) 412 6.5

Other LI (50-80% AMI) 371 5.0

MI (GT 80% AMI) 291 2.8

Household Size

1 Person NA NA

2 Persons 44 0.5

3 Persons 56 1.1

4 Persons 250 6.4

5+ Persons 1,285 43.4

Source: HUD-PD&R tabulations of AHS data. 

* Income categories in this table exclude lower-income subsets.

Crowding

While crowding (defined as more than one

person per room) is not a component of the

definition of worst case needs,38 it can be a

symptom of affordability problems and housing-related stress. Households may double up,

and young adults or couples may delay forming new households, because of an inability to

afford their own units. This section examines

the extent of crowding by income and location

as well as the supply of large units relative to

the number of large households.

Overall, about 4.8 percent of renter households

are crowded, as shown in Exhibit 4-11. The

incidence of crowding is significantly lower

in non-metropolitan areas, 3.4 percent, and

higher in central cities, 5.5 percent. On a

regional basis, the Midwest has substantially

less crowding, 2.7 percent, and the West has

substantially more, with an 8.4 percent incidence.

Larger households are much more likely 

than smaller households to be crowded.

Exhibit 4-12 shows a substantially greater

incidence of crowding among households with

five or more persons, with 43 percent of such

large households being crowded. Indeed, a

renter household with five or more members is

about seven times more likely to be crowded

than a renter household with four persons.
—43—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

Despite the inverse relationship between income and crowding, extremely lowincome households show less crowding than very low-income households do. This

is because extremely low-income households are disproportionately likely to be

one-person households, which by definition cannot be crowded.

Exhibit 4-13. Insufficiency of Large Units is Primarily a 

Problem of Availability for Large Families, Not Affordability

Crowding experienced by large families is

not caused merely by a lack of large units.

The number of affordable large units is

abundant relative to the number of large

households. In Exhibit 4-13, the Affordable

line is entirely above the 100-units-per-largehousehold line that denotes sufficient stock;

in fact, the number of affordable units with

five or more rooms is two to five times larger

than the number of households with five or

more persons.

The main cause of crowding must be the

lack of available affordable units. Thus,

crowding does not appear to be caused by

a lack of large units, but by the fact that

smaller households prefer these units as well

and keep them off the market. In addition,

large units may be concentrated in certain

areas, so that they are not available to large

households in other areas.

Exhibit 4-14 summarizes the supply of

rental units with five or more rooms relative

to households with five or more persons.

Even at 30 percent of AMI, there are 350.2

large units available for every 100 large

renter households, and this increases to

577.1 per 100 for middle income renters.

However, only 40.4 units are available per

100 extremely low-income households that

need large units. Even for very low-income

renters, there are only 81.6 units per 100

households.

Hispanic renter households are more likely

to be crowded. In 2005, 35 percent of very

low-income Hispanic households have no

severe problems yet are overcrowded according to the one-person-per-room benchmark

(Appendix, Table A-9). Hispanic families are

Exhibit 4-14. Metropolitan Patterns of Supply of Large Units

for Large Households (5+ persons and 5+ rooms only)

Income

Units per 100 Large Households

Affordable Affordable

and Available

Affordable, 

Available, and 

Adequate

Nation

ELI (0–30% AMI) 350.2 40.4 20.7

VLI (0–50% AMI) 483.2 81.6 38.2

LI (0–80% AMI) 577.1 116.1 59.2

Central Cities

ELI (0–30% AMI) 205.1 37.8 21.6

VLI (0–50% AMI) 365.4 72.2 34.2

LI (0–80% AMI) 496.2 107.5 52.0

Suburbs

ELI (0–30% AMI) 360.8 36.6 19.0

VLI (0–50% AMI) 449.6 73.8 39.1

LI (0–80% AMI) 567.8 112.2 63.6

Nonmetropolitan

ELI (0–30% AMI) 867.8 59.0 21.1

VLI (0–50% AMI) 960.2 131.6 49.1

LI (0–80% AMI) 830.0 149.9 69.1

Source: HUD-PD&R tabulations of AHS data. 
—44—

more likely to live in multi-generational households in non-caregiving relationships

(Census Bureau 2003). Non-Hispanic blacks, and especially whites, are less likely to

live in this arrangement39 and much less likely to be overcrowded.

Thus, the availability of large units in regions where the Hispanic population is large

is worthy of consideration.

The importance of this association is increased by the fact that Hispanics represent

the fastest-growing segment of the U.S. population. The Hispanic population

increased by 58 percent between 1990 and 2000, and is projected to increase another

34 percent by 2010 (Census Bureau 2004).

Hispanics are concentrated in the West, as 43 percent of the Hispanic population

lived there in 2000 (Census Bureau 2001). The West also is the region where the

incidence of crowding is almost twice as great as any other region (Exhibit 4-11)

and that has the most severe shortage of VLI-affordable units, with only 60.2 units

available per 100 very low-income renters (Exhibit 4-7).

Exhibit 4-15 shows that for every 100 large

very low-income renter households in the

West, only 37.5 large units are available.

The availability of large affordable units is

substantially more limited in the West than in

other regions. Available large units for very

low-income renters are fully adequate in the

Midwest and South, at least on a regional basis.

Summary

One way to assess the condition of the

market for affordable rental housing is to

compare, on a cumulative basis, the number

of affordable units with the number of renters

relative to their income levels. This chapter

has presented three such ratios, based on (1)

affordable units, (2) affordable units that also

are occupied by such renters or are available

for rent, and (3) affordable and available units

that also are in physically adequate condition.

39 While 8 percent of both black and Hispanic adults over age 30 were grandparents living with

their grandchildren in 2000 (compared with 2 percent of non-Hispanic whites over age 30), only 35

percent of these Hispanic grandparents lived there to care for the grandchildren, compared with 52

percent of the black grandparents (U.S. Census Bureau 2003).

Exhibit 4-15. Regional Patterns of Supply of Large Units

for Large Households (5+ persons and 5+ rooms only)

Income

Units per 100 Large Households

Affordable Affordable

and Available

Affordable, 

Available, and 

Adequate

Northeast

ELI (0–30% AMI) 341.7 30.8 19.2

VLI (0–50% AMI) 484.2 66.5 44.0

LI (0–80% AMI) 558.2 91.2 58.4

Midwest

ELI (0–30% AMI) 440.5 51.7 28.0

VLI (0–50% AMI) 808.4 139.8 56.0

LI (0–80% AMI) 798.9 176.1 74.2

South

ELI (0–30% AMI) 444.4 54.8 23.1

VLI (0–50% AMI) 602.5 109.1 41.5

LI (0–80% AMI) 740.8 151.5 64.6

West

ELI (0–30% AMI) 208.6 25.6 15.0

VLI (0–50% AMI) 223.3 37.5 23.8

LI (0–80% AMI) 337.5 69.7 47.8

Source: HUD-PD&R tabulations of AHS data. 
—45—

A v a i l a b i l i t y o f 

A f f o r d a b l e H o u s i n g S t o c k

Nationwide in 2005, there existed a rental unit that would have been affordable

for every renter household with income above 45 percent of area median income.

However, the comparable figure in 2003 was 40 percent, implying that the affordable

rental stock decreased relative to the number of households in this critical very lowincome range.

The number of affordable units that are actually available to households with the lowest incomes was substantially fewer than the number of apparently affordable units

because many affordable units were rented to higher income families. Employing

the Availability measure, the national supply of affordable units per renter household

does not become sufficient until household incomes reach 125 percent of AMI.

Available units become progressively harder to obtain at lower income levels. While

there were 107 affordable units available per 100 low-income renters, the availability

ratio was only 77 per 100 very low-income renters and 40 per 100 extremely

low-income renters. National measures of affordability and availability do not fully

reflect the regional concentrations or shortages of units relative to households.

Nonmetropolitan areas have more affordable and available rental units than cities or

suburbs. However, the immobility of housing makes such units inaccessible for very

low-income renters who need them near their families and place of employment.

In addition, larger households are much more likely than smaller households to be

crowded, and many large units exist in areas where they are unavailable to large families.

A substantial proportion of available units are physically inadequate. Employing the

additional criterion of physical adequacy, the number of available units in 2005 was

reduced from 77 to 68 units per 100 very low-income renters, and from 40 to 35

units per 100 extremely low-income renters.

Occupancy by higher-income households restricts the supply of units renting for less

than the Fair Market Rent to only about 87 percent of households who can afford

only such units. Thus, even households with rental assistance may in some areas have

difficulty locating a suitable unit.

The decline in availability of affordable units between 2003–2005 can be attributed

to a modest increase in renter households that interacted with stagnant income levels

and rising monthly housing costs. For both very low-income and extremely low-income renters, affordability ratios declined by more than 10 units per 100 renters and

availability ratios declined by more than 4 units per 100 renters.

This analysis of affordability and availability reinforces and helps explain the findings of Chapter 2 that the affordable housing market is increasingly tight and that

worst case needs for such housing increased during the 2003–2005 period.

—47—

N e i g h b o r h o o d P o v e r t y a n d 

W o r s t C a s e N e e d s

Chapter 5. Neighborhood Poverty

and Worst Case Needs

Poverty and Neighborhood Distress

The analysis in this report has focused primarily on households’ rent burdens or

the physical condition of their housing units in assessing whether they have severe

housing needs. This chapter takes the analysis one step further by examining the

neighborhood poverty experienced by very low-income renters.40 A family renting

a home purchases not only the physical aspects of the housing unit, but also the

neighborhood living environment and the services provided by the community.

Neighborhood quality can have a significant impact on a household’s welfare. For

example, given the same severity of rent burden, income level, and physical housing

problems, renters in disadvantaged neighborhoods clearly could be worse off than

comparable renters in better neighborhoods.

Categorizing Neighborhoods

In this analysis, neighborhood poverty rates are used as a proxy for overall neighborhood well-being. Although numerous non-economic aspects of neighborhood quality

such as crime rates and educational outcomes operate independently of poverty

rates, substantial research has shown important correlations. In particular, poverty

rates exceeding 30 percent or 40 percent thresholds frequently are accompanied by a

variety of other physical and social problems with negative outcomes for families.41

This report defines four neighborhood types by first ranking census tracts by their

poverty rates, not counting college students. Each census tract is assumed to define a

neighborhood.

The 10 percent of neighborhoods with the highest non-college poverty rates constitute the first decile of the neighborhood distribution. Neighborhoods in this category

have non-college poverty rates of about 30 percent or more. The next 10 percent of

neighborhoods (decile 2) have non-college poverty rates of about 20–30 percent.

The third group comprises the next 30 percent of neighborhoods (deciles 3–5),

which have poverty rates of 10–20 percent, a range that includes the national average

poverty rate. The remaining 50 percent of neighborhoods constitute deciles 5–10,

meaning that they lie beyond (in this case, below) the median poverty rate. The noncollege poverty rates of neighborhoods in this half are less than 10 percent.

The distribution of renters residing in neighborhoods in each poverty category 

does not correspond exactly to the proportion of neighborhoods in that category. 

40 This chapter draws from a more extensive working paper of Carolyn Lynch of HUD’s Office of

Policy Development and Research.

41 Kingsley and Pettit 2003; Jargowsky 1997.
—48—

Exhibit 5-1 shows that the poorest 10 percent of neighborhoods contains 11.3 percent of renters. The next decile of neighborhoods contains 12.8 percent of renters.

Deciles 3–5 contain 35.3 percent of renters, rather than the 30 percent that would

occur if they were distributed uniformly. Accordingly, the low-poverty neighborhoods in the upper half contain only 40.6 percent of renter households, reflecting the

greater prevalence of owner-occupied housing.

Exhibit 5-1. Distribution of Renter Households by Neighborhood Poverty

Census Tracts Ranked by Non-College Poverty Rates

Decile 1

(highest 10%)

Decile 2

(next 10%)

Deciles 3-5

(next 30%)

Deciles 6-10

(lowest 50%) Total

All Renters 3,837 4,356 11,975 13,783 33,951

as percent of all Renters 11.3% 12.8% 35.3% 40.6% 100.0%

Source: Census Bureau tabulations of AHS data performed under contract to HUD.

Distribution of Worst Case Needs Relative to Neighborhood 

Poverty

Exhibit 5-2 shows the number and proportion of very low-income renters that reside

in each neighborhood poverty group, both nationwide and in terms of metropolitan

Exhibit 5-2. Distribution of Very Low-Income Renters and Worst Case Needs 

by Neighborhood Poverty and Metropolitan Status

Census Tracts Ranked by Non-College Poverty Rates

Decile 1

(highest 10%)

Decile 2

(next 10%)

Deciles 3-5

(next 30%)

Deciles 6-10

(lowest 50%) Total

Central Cities

VLI Renters 2,074 1,539 2,470 1,423 7,505

 as percent of all VLI Renters 27.6% 20.5% 32.9% 19.0% 100.0%

VLI Renters with worst case needs 652 624 989 645 2,909

 as percent of all worst case needs 22.4% 21.5% 34.0% 22.2% 100.0%

Suburbs

VLI Renters 301 565 1,855 2,696 5,417

 as percent of all VLI Renters 5.6% 10.4% 34.2% 49.8% 100.0%

VLI Renters with worst case needs 102 226 666 1,098 2,092

 as percent of all worst case needs 4.9% 10.8% 31.8% 52.5% 100.0%

Non-Metropolitan Areas

VLI Renters 266 454 1,638 791 3,150

 as percent of all VLI Renters 8.4% 14.4% 52.0% 25.1% 100.0%

VLI Renters with worst case needs 88 137 480 285 991

 as percent of all worst case needs 8.9% 13.8% 48.4% 28.8% 100.0%

Total, All Areas

VLI Renters 2,641 2,559 5,963 4,909 16,071

 as percent of all VLI Renters 16.4% 15.9% 37.1% 30.5% 100.0%

VLI Renters with worst case needs 842 988 2,135 2,027 5,992

 as percent of all worst case needs 14.1% 16.5% 35.6% 33.8% 100.0%

Source: Census Bureau tabulations of AHS data performed under contract to HUD.
—49—

N e i g h b o r h o o d P o v e r t y a n d 

W o r s t C a s e N e e d s

status. It also shows the number and proportion of very low-income renters with

worst case needs in those areas. For comparative perspective, the bottom two rows

show the number and proportion of all renters in each neighborhood group.

The exhibit shows that very low-income renters are more likely to live in poorer

neighborhoods, with 16.4 percent living in the poorest decile and another 15.9 percent living in the next decile. By comparison, the neighborhoods in the upper half,

deciles 6–10, contain only 30.5 percent of very low-income renters, despite containing 40.6 percent of renters overall. The concentration of very low-income renters in

neighborhoods with higher poverty rates may reflect the lower rents that are typically

found in poorer neighborhoods.

The distribution of worst case needs, seen in the percentage distributions for “all

areas” as well as throughout the table, tracks very closely with the distribution of

very low-income renters. Neighborhood poverty rates, with all their implications for

rents and quality of housing, do not strongly affect the incidence of worst case needs

for very low-income renters who reside there. Even in low-poverty neighborhoods,

the proportions of very low-income renters (30.5 percent) and of worst case needs

(33.8 percent) differ by only 3.3 percentage points.

Nevertheless, this same difference of 3.3 percentage points does indicate that very

low-income renters who have worst case needs are more likely to live in better

neighborhoods than the proportional share of very low-income renters might suggest.

Across all three metropolitan categories—cities, suburbs, and non-metropolitan

areas—the proportion of worst case needs households found within deciles 6–10

exceeds the proportion of very low-income renters in those neighborhoods.

Two explanations could account plausibly for the concentration of worst case needs,

relative to very low-income renters, within neighborhoods with little poverty.

Unfortunately, these AHS data do not support definitive conclusions about the extent

to which each is true.

First, it is probable that a number of local markets do not include neighborhoods

from each of these poverty categories because census tracts are assigned to

categories on a national basis. In markets with a restricted range of neighborhood

types, and especially in view of the national shortage of affordable housing, very

low-income renters might well be forced to locate in neighborhoods with a restricted

amount of affordable housing and pay higher rents.

Notably, Exhibit 5-2 shows that in suburban areas, almost half of very low-income

renters (49.8 percent) and more than half of those with worst case needs (52.5 percent) live in the half of suburban neighborhoods with the lowest poverty rates. These

high proportions reflect the fact that numerous metropolitan areas have few suburban

neighborhoods that would be classed in the first or second deciles of high poverty

on a national basis. In such metropolitan areas, the only suburban residential options

that very low-income renters have may be located in low-poverty neighborhoods but

cause them severe rent burdens.
—50—

Within central cities, in contrast, about one-fourth of both very low-income renters

(27.6 percent) and of worst case needs (22.4 percent) are found in neighborhoods

from the poorest decile. Non-metropolitan areas are in a different situation, with

more than half of very low-income renters (52.0 percent) and a similarly large

proportion of worst case needs (48.4 percent) occurring in moderate poverty neighborhoods from deciles 3–5. Similar to the situation in suburban areas, it is likely that

numerous non-metropolitan areas consist entirely of neighborhoods in this group,

and so present very low-income renters with few choices about whether to lease

housing causing severe rent burdens.

There is a secondary possible explanation for the presence of a greater proportion

of worst case needs than of very low-income renters within the lowest poverty

neighborhoods: that a small percentage of very low-income renters may have lowercost housing options yet accept severe rent burdens as the price of locating in better

neighborhoods. Rent burdens might be an acceptable trade-off for households who

value proximity to family, security, or other neighborhood amenities more highly, or

who face fewer demands on their discretionary income.

To explain the distribution of very low-income renters and worst case needs fully

would require further research focusing on small areas. Yet, the American Housing

Survey data presented here do indicate that local markets are significant at the

national level.

Finally, it is useful to remember that in the 2005 American Housing Survey 4.55 million very low-income renters reported that they received housing assistance. This

figure represents 76 percent of the number with worst case needs, so the distribution

of households with worst case needs by neighborhood poverty would, in all likelihood, be shifted markedly in the absence of housing assistance.

Relation of Neighborhood Poverty to Incidence of Worst 

Case Needs

The previous exhibit demonstrated that both very low-income renters and worst

case needs are found within neighborhoods of diverse poverty levels. Exhibit 5-3

examines whether there is a plausible connection of neighborhood poverty rates and

the incidence of worst case needs among very low-income renters.

Comparing the incidence of worst case needs across the neighborhood types reveals

that there is to some extent an inverse correlation between neighborhood poverty and

the probability of worst case needs for very low-income renters. While 37.3 percent

of very low-income households overall have worst case needs, the incidence is lower,

31.9 percent, within the poorest neighborhoods and higher, 41.3 percent, in the half

with low poverty rates. However, the strength of this association is limited. Within all

three metropolitan categories, deciles 3–5 show slightly lower incidence than decile

2—rather than the higher incidence that would be expected if neighborhood poverty

were a primary contributor to worst case needs.
—51—

N e i g h b o r h o o d P o v e r t y a n d 

W o r s t C a s e N e e d s

Low poverty neighborhoods in deciles 6–10 appear to have the strongest impact on

incidence of worst case needs when they are located in cities. Incidence is highest

in central cities, at 45.3 percent, followed by suburbs, where incidence reaches

40.7 percent in the low-poverty neighborhoods. Overall, very low-income renters are

less likely to reside in low-poverty neighborhoods, but when they do they are more

likely to have worst case needs, most likely because of severe rent burdens.

The incidence and the distribution of worst case needs would be very different in the

absence of housing assistance. Housing assistance is distributed neither uniformly

nor proportionally across neighborhood poverty categories. The lowest decile of

neighborhoods in central cities, and the lower deciles in non-metropolitan areas, include

more very low-income renters with housing assistance than with worst case needs.

Summary

This analysis is an exploratory attempt to examine how neighborhood conditions,

particularly conditions associated with poverty rates, are related with worst case

needs. While there are some intriguing results, overall it appears that neighborhood

poverty levels are associated only indirectly with worst case housing needs.

Very low-income renters and households with worst case needs are more likely to

live in poorer neighborhoods, as 32.3 percent of very low-income renters and 30.6

percent of renters with worst case needs were living in the 20 percent of neighborhoods with the highest poverty rates during 2005. The concentration of very low-income renters in neighborhoods with higher poverty rates may reflect the lower rents

Exhibit 5-3. Very Low-Income Renters and Incidence of Worst Case Needs

by Metropolitan Status and Neighborhood Poverty

Census Tracts Ranked by Non-College Poverty Rates

Decile 1

(highest 10%)

Decile 2

(next 10%)

Deciles 3-5

(next 30%)

Deciles 6-10

(lowest 50%) Total

Central Cities

VLI Renters 2,074 1,539 2,470 1,423 7,505

 % with worst case needs 31.4% 40.5% 40.0% 45.3% 38.8%

Suburbs

VLI Renters 301 565 1,855 2,696 5,417

 % with worst case needs 33.9% 40.0% 35.9% 40.7% 38.6%

Non-Metropolitan Areas

VLI Renters 266 454 1,638 791 3,150

 % with worst case needs 33.1% 30.2% 29.3% 36.0% 31.5%

Total, All Areas

VLI Renters 2,641 2,559 5,963 4,909 16,071

 % with worst case needs 31.9% 38.6% 35.8% 41.3% 37.3%

Source: Census Bureau tabulations of AHS data performed under contract to HUD.
—52—

that are typically found in poorer neighborhoods. The distribution of households with

worst case needs probably would be shifted in the absence of housing assistance.

Neighborhoods ranked in the lowest half of poverty rates contain 30.5 percent of

very low-income renters and 33.8 percent of worst case needs. Although the distribution of worst case needs is very similar to the distribution of very low-income renters

nationwide and in terms of metropolitan status, within each metropolitan category,

the proportion of worst case households found in low-poverty neighborhoods

exceeds the proportion of very low-income renters found there. There is higher

incidence of worst case needs, 41.3 percent, among very low-income renters in these

neighborhoods, reflecting their higher rents.

These patterns suggest several factors are at work. The neighborhood data provide

evidence, consistent with the rest of this report, that worst case needs result primarily

from a lack of affordable housing options where very low-income renters live. Yet,

households also make choices from the alternatives available to them that have

implications for the national scope of worst case needs. Accordingly, the relationship

between neighborhood poverty and worst case needs is worthy of further research.
—53—

W o r k s C i t e d

Appendix

Works Cited

Berube, Alan. 2006. “Using the Earned Income Tax Credit to Stimulate Local

Economies.” Washington, DC: Brookings Institution. http://www.brook.edu/metro/

pubs/Berube20061101eitc.pdf.

Eggers, Frederick J. and Fouad Moumen. 2007. “Rental Market Dynamics:

2003–2005.” U.S. Department of Housing and Urban Development, Office of Policy

Development and Research. http://www.huduser.org/datasets/cinch.html.

Jargowsky, Paul A. 1997. Poverty and Place; Ghettos, Barrios, and the American 

City. New York: Russell Sage Foundation.

Joint Center for Housing Studies of Harvard University. 2006. “State of the Nation’s

Housing 2006.” Cambridge, MA. www.jchs.harvard.edu.

Khadduri, Jill, Kimberly Burnett and David Rodda. 2003. “Targeting Housing

Production Subsidies: Literature Review.” U.S. Department of Housing and Urban

Development, Office of Policy Development and Research. http://www.huduser.

org/publications/pdf/targetinglitreview.pdf.

Kingsley, G. Thomas and Kathryn L.S. Pettit. 2003. “Concentrated Poverty: A

Change in Course.” Neighborhood Change in Urban America, No. 2. Washington,

DC: Urban Institute. www.urban.org/nnip.

Shroder, Mark. 2002. “Does housing assistance perversely affect self-sufficiency? A

review essay.” Journal of Housing Economics. 11: 381–417.

Susin, Scott. 2006. Working paper. “Duration of Rent Burden as a Measure of Need.”

U.S. Census Bureau. 2001. “The Hispanic Population: 2000.” Census 2000 Brief

C2KBR/01-3.

U.S. Census Bureau. 2003. “Grandparents Living with Grandchildren: 2000.” Census

2000 Brief C2KBR-31.

U.S. Census Bureau. 2004. “U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin.” http://www.census.gov/ipc/www/usinterimproj/.

U.S. Census Bureau. 2005. “American Housing Survey for the United States: 2003.”

Series H150/03, Housing and Household Economic Statistics Division. http://www.

census.gov/hhes/www/housing/ahs/ahs01_2000wts/ahs01_2000wts.html.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2003. Trends in Worst Case Needs for Housing, 1978–1999: A Report 

to Congress on Worst Case Housing Needs—Plus Update on Worst Case Needs in 

2001. http://www.huduser.org/publications/affhsg/worstcase03.html.
—54—

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2005a. Affordable Housing Needs: A Report to Congress on the Significant Need for Housing. http://www.huduser.org/publications/affhsg/affhsgneed.

html.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2005b. “FY 2005 HUD Income Limits Briefing Material.” http://www.

huduser.org/datasets/il/il05/index.html.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2006a. “Programs of HUD, 2006: Major Mortgage, Grant, Assistance

and Regulatory Programs.” http://www.huduser.org/resources/hudprgs/ProgOfHUD06.pdf.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2006b. “U.S. Housing Market Conditions.” http://www.huduser.

org/periodicals/ushmc.htm.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2006c. “Fair Market Rents.” http://www.huduser.org/datasets/fmr.

html.

U.S. Department of Housing and Urban Development, Office of Policy Development

and Research. 2006d. Codebook for the American Housing Survey, Public Use File: 

1997 and Later. http://www.huduser.org/datasets/ahs/ahsprev.html.

U.S. Department of Housing and Urban Development, Office of Community Planning and Development. 2007. The Annual Homeless Assessment Report to Congress.

http://www.huduser.org/publications/povsoc/annual_assess.html.
—55—

D a t a o n H o u s i n g P r o b l e m s

Appendix A. Data on Housing Problems and Supply of 

Affordable Housing

List of Tables

Table A–1a. Housing Conditions of Renter Households by Relative Income, 

2003 and 2005............................................................................................................56

Table A–1b. Housing Conditions of Owner Households by Relative Income, 

2003 and 2005............................................................................................................57

Table A–2a. Housing Conditions of Renters and Owners, 1991–2005— 

Number of Households..............................................................................................58

Table A–2b. Housing Conditions of Renters and Owners, 1991–2005— 

Percentage of Households..........................................................................................59

Table A–3. Housing Conditions of Unassisted Renter Households by Relative

Income, 2003 and 2005..............................................................................................60

Table A–4. Incidence of Housing Problems among Renters by Relative Income, 

2003 and 2005—Number and Percentage.................................................................61

Table A–5. Incidence of Housing Problems among Very Low-Income Renters 

by Household Type, 2003 and 2005—Number and Percentage.................................64

Table A–6a. Housing Problems and Characteristics of Very Low-Income 

Renters by Household Type, 2005..............................................................................66

Table A–6b. Housing Problems and Characteristics of Extremely Low-Income

Renters by Household Type, 2005..............................................................................68

Table A–7. Housing Problems and Characteristics of Worst Case Renters by

Household Type, 2005................................................................................................70

Table A–8. Housing Problems and Characteristics of Extremely Low-Income 

Worst Case Renters by Household Type, 2005..........................................................72

Table A–9. Incidence of Housing Problems among Very Low-Income Renters 

by Race and Ethnicity, 2003 and 2005—Number and Percentage............................74

Table A–10. Incidence of Housing Problems among Very Low-Income Renters 

by Region, 2003 and 2005—Number and Percentage...............................................76

Table A–11. Incidence of Housing Problems among Very Low-Income Renters 

by Metropolitan Location, 2003 and 2005—Number and Percentage......................78

Table A–12. Households Occupying U.S. Rental Units, by Affordability of Rent 

and Income of Occupants, 2003 and 2005.................................................................80

Table A–13. Renters and Rental Units Affordable and Available to Them, 

by Relative Income, 1991–2005................................................................................81

Table A–14. Average Income and Average Gross Rent of Renter Households by

Relative Income, 2003 and 2005................................................................................82
—56—

Table A–1a. Housing Conditions of Renter Households by Relative Income, 2003 and 2005

Household Income as Percentage 

of HUD-Adjusted Area Median Family Income

2005 0–30% 30–50% 50–80% 80–120% >120% All Incomes

Total Households (1000) 9,729 6,342 7,488 5,449 4,943 33,951 

Unassisted with Severe Problems a 4,643 1,349 472 264 132 6,860 

Unassisted with non-Severe Problems Onlya 981 2,604 2,363 799 557 7,303 

Unassisted with No Problemsa 816 1,127 3,661 3,832 3,804 13,240 

Assisted 3,289 1,262 992 555 450 6,547 

Any with Severe Problems 6,151 1,548 532 290 145 8,665 

Rent Burden >50% of Income 5,999 1,361 321 147 61 7,891 

Severely Inadequate Housing 430 228 215 142 84 1,100 

Any with non-Severe Problems Onlyb 1,804 3,253 2,727 909 593 9,286 

Rent Burden 30–50% of Income 1,535 2,934 2,091 452 226 7,238 

Moderately Inadequate Housing 340 417 488 325 289 1,859 

Crowded Housing 229 346 347 170 109 1,200 

Any with No Problems 1,775 1,542 4,229 4,249 4,204 16,000 

2003

Total Households (1000) 9,077 6,581 7,460 5,416 5,080 33,614

Unassisted with Severe Problemsa 3,999 1,176 436 158 117 5,887 

Unassisted with non-Severe Problems Onlya 1,145 2,860 2,254 757 542 7,557 

Unassisted with No Problemsa 947 1,275 3,842 3,942 3,952 13,958 

Assisted 2,986 1,270 929 558 469 6,211 

Any with Severe Problems 5,136 1,344 476 186 131 7,273 

Rent Burden >50% of Income 4,945 1,160 280 64 29 6,477 

Severely Inadequate Housing 401 213 199 122 102 1,038 

Any with non-Severe Problems Onlyb 1,936 3,458 2,529 855 607 9,385 

Rent Burden 30–50% of Income 1,664 3,059 1,872 413 200 7,207 

Moderately Inadequate Housing 364 474 497 349 331 2,017 

Crowded Housing 216 403 349 148 104 1,220 

Any with No Problems 2,005 1,779 4,455 4,375 4,342 16,956

Source: HUD-PD&R tabulations of AHS data.

a

 See Table A-3 for housing problems experienced by unassisted renters.

b See Table A-2 for estimates of the incidence of non-severe problems without regard to whether severe problems are also present.
—57—

D a t a o n H o u s i n g P r o b l e m s

Table A–1b. Housing Conditions of Owner Households by Relative Income, 2003 and 2005

Household Income as Percentage 

of HUD-Adjusted Area Median Family Income

2005 0–30% 30–50% 50–80% 80–120% >120% All Incomes

Total Households (1000) 7,473 7,614 11,820 15,230 32,812 74,950 

Unassisted with Severe Problems 4,444 1,836 1,481 850 671 9,282 

Unassisted with non-Severe Problems Only 1,670 2,183 3,555 3,300 2,838 13,546 

Unassisted with No Problems 1,360 3,596 6,784 11,080 29,302 52,122 

Assisted — — — — — —

Any with Severe Problems 4,444 1,836 1,481 850 671 9,282 

Cost Burden >50% of Income 4,360 1,744 1,347 685 405 8,542 

Severely Inadequate Housing 201 130 156 170 266 923 

Any with non-Severe Problems Only 1,670 2,183 3,555 3,300 2,838 13,546 

Cost Burden 30–50% of Income 1,508 1,919 3,099 2,876 2,378 11,780 

Moderately Inadequate Housing 195 224 352 260 353 1,384 

Crowded Housing 56 142 255 237 146 837 

Any with No Problems 1,360 3,596 6,784 11,080 29,302 52,122 

2003

Total Households (1000) 6,677 7,832 12,278 14,281 31,186 72,254

Unassisted with Severe Problems 3,392 1,596 1,313 642 568 7,511 

Unassisted with non-Severe Problems Only 1,517 2,232 3,226 2,844 2,413 12,233 

Unassisted with No Problems 1,769 4,004 7,738 10,795 28,204 52,510 

Assisted — — — — — —

Any with Severe Problems 3,392 1,596 1,313 642 568 7,511 

Cost Burden >50% of Income 3,273 1,481 1,148 502 308 6,711 

Severely Inadequate Housing 198 148 182 145 260 933 

Any with non-Severe Problems Only 1,517 2,232 3,226 2,844 2,413 12,233 

Cost Burden 30–50% of Income 1,338 1,891 2,780 2,400 1,837 10,246 

Moderately Inadequate Housing 227 304 323 278 444 1,576 

Crowded Housing 64 148 214 226 166 817 

Any with No Problems 1,769 4,004 7,738 10,795 28,204 52,510 

Source: HUD-PD&R tabulations of AHS data.
—58—

Table A–2a. Housing Conditions of Renters and Owners, 1991–2005—Number of Households

 1991 1993 1995 1997 1999 2001 2003 2005

Total Households (1000) 93,147 94,723 97,694 99,487 102,802 105,435 105,868 108,901

Unassisted with Severe Problems 10,430 10,350 11,744 12,206 12,203 13,494 13,398 16,142

Unassisted with non-Severe Problems Only 16,612 16,399 17,693 17,900 18,237 19,217 19,790 20,849

Unassisted with No Problems 61,302 62,950 63,023 63,682 66,163 66,445 66,468 65,362

Assisted 4,801 5,025 5,230 5,697 6,168 6,279 6,211 6,547

Cost Burden >50% of Income 8,925 9,725 11,158 12,223 12,141 13,330 13,188 16,433

Cost Burden 30–50% of Income 14,145 14,333 15,481 15,115 15,862 16,923 17,856 19,403

Severely Inadequate Housing 2,874 1,901 2,022 1,797 2,056 2,108 1,971 2,023

Moderately Inadequate Housing 4,531 4,225 4,348 5,191 4,821 4,504 4,311 4,177

Crowded Housing 2,527 2,386 2,554 2,807 2,570 2,631 2,559 2,621

Renter Households (1000) 33,351 33,472 34,150 34,000 34,007 33,727 33,614 33,951

Unassisted with Severe Problems 5,580 5,671 5,777 6,024 5,591 5,758 5,887 6,860

Unassisted with non-Severe Problems Only 7,342 7,287 7,651 7,451 7,560 7,283 7,557 7,303

Unassisted with No Problems 15,627 15,489 15,492 14,827 14,657 14,407 13,958 13,240

Assisted 4,801 5,025 5,230 5,697 6,203 6,279 6,211 6,547

Rent Burden >50% of Income 5,478 5,947 6,236 6,686 6,301 6,412 6,477 7,891

Rent Burden 30–50% of Income 6,964 7,157 7,424 6,778 7,141 6,916 7,468 7,502

Severely Inadequate Housing 1,347 909 849 1,072 1,183 1,168 1,038 1,100

Moderately Inadequate Housing 2,375 2,254 2,277 3,021 2,768 2,508 2,525 2,542

Crowded Housing 1,644 1,503 1,673 1,891 1,666 1,658 1,615 1,635

Owner Households (1000) 59,796 61,251 63,544 65,487 68,795 71,708 72,254 74,950

Unassisted with Severe Problems 4,850 4,678 5,967 6,182 6,604 7,736 7,511 9,282

Unassisted with non-Severe Problems Only 9,270 9,112 10,042 10,449 10,684 11,934 12,233 13,546

Unassisted with No Problems 45,675 47,461 47,531 48,855 51,507 52,038 52,510 52,122

Assisted — — — — — — — —

Cost Burden >50% of Income 3,447 3,778 4,922 5,537 5,841 6,918 6,711 8,542

Cost Burden 30–50% of Income 7,181 7,176 8,057 8,337 8,716 10,007 10,388 11,901

Severely Inadequate Housing 1,527 992 1,173 725 867 940 933 923

Moderately Inadequate Housing 2,156 1,971 2,071 2,170 2,064 1,996 1,786 1,635

Crowded Housing 883 883 881 916 894 973 944 986

Source: HUD-PD&R tabulations of AHS data.
—59—

D a t a o n H o u s i n g P r o b l e m s

Table A–2b. Housing Conditions of Renters and Owners, 1991–2005—Percentage of Households

 1991 1993 1995 1997 1999 2001 2003 2005

Total Households 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Unassisted with Severe Problems 11.2% 10.9% 12.0% 12.3% 11.9% 12.8% 12.7% 14.8%

Unassisted with non-Severe Problems Only 17.8% 17.3% 18.1% 18.0% 17.7% 18.2% 18.7% 19.1%

Unassisted with No Problems 65.8% 66.5% 64.5% 64.0% 64.4% 63.0% 62.8% 60.0%

Assisted 5.2% 5.3% 5.4% 5.7% 6.0% 6.0% 5.9% 6.0%

Cost Burden >50% of Income 9.6% 10.3% 11.4% 12.3% 11.8% 12.6% 12.5% 15.1%

Cost Burden 30–50% of Income 15.2% 15.1% 15.8% 15.2% 15.4% 16.1% 16.9% 17.8%

Severely Inadequate Housing 3.1% 2.0% 2.1% 1.8% 2.0% 2.0% 1.9% 1.9%

Moderately Inadequate Housing 4.9% 4.5% 4.5% 5.2% 4.7% 4.3% 4.1% 3.8%

Crowded Housing 2.7% 2.5% 2.6% 2.8% 2.5% 2.5% 2.4% 2.4%

Renter Households 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Unassisted with Severe Problems 16.7% 16.9% 16.9% 17.7% 16.4% 17.1% 17.5% 20.2%

Unassisted with non-Severe Problems Only 22.0% 21.8% 22.4% 21.9% 22.2% 21.6% 22.5% 21.5%

Unassisted with No Problems 46.9% 46.3% 45.4% 43.6% 43.1% 42.7% 41.5% 39.0%

Assisted 14.4% 15.0% 15.3% 16.8% 18.2% 18.6% 18.5% 19.3%

 

Rent Burden >50% of Income 16.4% 17.8% 18.3% 19.7% 18.5% 19.0% 19.3% 23.2%

Rent Burden 30–50% of Income 20.9% 21.4% 21.7% 19.9% 21.0% 20.5% 22.2% 22.1%

Severely Inadequate Housing 4.0% 2.7% 2.5% 3.2% 3.5% 3.5% 3.1% 3.2%

Moderately Inadequate Housing 7.1% 6.7% 6.7% 8.9% 8.1% 7.4% 7.5% 7.5%

Crowded Housing 4.9% 4.5% 4.9% 5.6% 4.9% 4.9% 4.8% 4.8%

Owner Households 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Unassisted with Severe Problems 8.1% 7.6% 9.4% 9.4% 9.6% 10.8% 10.4% 12.4%

Unassisted with non-Severe Problems Only 15.5% 14.9% 15.8% 16.0% 15.5% 16.6% 16.9% 18.1%

Unassisted with No Problems 76.4% 77.5% 74.8% 74.6% 74.9% 72.6% 72.7% 69.5%

Assisted — — — — — — — —

Cost Burden >50% of Income 5.8% 6.2% 7.7% 8.5% 8.5% 9.6% 9.3% 11.4%

Cost Burden 30–50% of Income 12.0% 11.7% 12.7% 12.7% 12.7% 14.0% 14.4% 15.9%

Severely Inadequate Housing 2.6% 1.6% 1.8% 1.1% 1.3% 1.3% 1.3% 1.2%

Moderately Inadequate Housing 3.6% 3.2% 3.3% 3.3% 3.0% 2.8% 2.5% 2.2%

Crowded Housing 1.5% 1.4% 1.4% 1.4% 1.3% 1.4% 1.3% 1.3%

Source: HUD-PD&R tabulations of AHS data.
—60—

Table A–3. Housing Conditions of Unassisted Renter Households

by Relative Income, 2003 and 2005

Household Income as Percentage 

of HUD-Adjusted Area Median Family Income

2005 0–30% 30–50% 50–80% 80–120% >120% All Incomes

Total Unassisted Households (1000) 6,440 5,081 6,496 4,894 4,492 27,404

Any with Severe Problems 4,643 1,349 472 264 132 6,860

Rent Burden >50% of Income 4,545 1,184 295 134 56 6,214 

 [and Rent > Fair Market Rent] 1,454 829 290 134 56 2,763 

Severely Inadequate Housing 318 203 182 129 76 908 

Any with non-Severe Problems Only 981 2,604 2,363 799 557 7,303

Rent Burden 30–50% of Income 833 2,375 1,836 397 216 5,657 

Moderately Inadequate Housing 203 339 421 273 273 1,509 

Crowded Housing 153 271 285 158 97 963 

Any with No Problems 816 1,127 3,661 3,832 3,804 13,240

2003

Total Unassisted Households (1000) 6,093 5,309 6,531 4,858 4,611 27,402 

Any with Severe Problems 3,996 1,180 436 158 117 5,887

Rent Burden >50% of Income 3,875 1,039 256 57 29 5,255 

 [and Rent > Fair Market Rent] 1,243 706 245 57 29 2,280 

Severely Inadequate Housing 280 164 182 101 88 816 

Any with non-Severe Problems Only 1,150 2,855 2,254 757 542 7,557

Rent Burden 30–50% of Income 966 2,525 1,665 372 180 5,709 

Moderately Inadequate Housing 253 392 435 307 302 1,690 

Crowded Housing 153 338 310 133 87 1,022 

Any with No Problems 947 1,275 3,842 3,942 3,952 13,958

Source: HUD-PD&R tabulations of AHS data.
—61—

D a t a o n H o u s i n g P r o b l e m s

Table A–4. Incidence of Housing Problems among Renters

by Relative Income, 2003 and 2005—Number and Percentage

2003 2005 2003 2005

Renter Households (1000) 33,614 33,951 100.0% 100.0%

Unassisted with Severe Problems 5,887 6,860 17.5% 20.2%

Unassisted with non-Severe Problems Only 7,557 7,303 22.5% 21.5%

Unassisted with No Problems 13,958 13,240 41.5% 39.0%

Assisted 6,211 6,547 18.5% 19.3%

Any with Severe Problems 7,273 8,665 21.6% 25.5%

Rent Burden >50% of Income 6,477 7,891 19.3% 23.2%

Severely Inadequate Housing 1,038 1,100 3.1% 3.2%

Rent Burden Onlya 5,727 6,883 17.0% 20.3%

Any with non-Severe Problems Only 9,385 9,286 27.9% 27.4%

Rent Burden 30–50% of Income 7,207 7,238 21.4% 21.3%

Moderately Inadequate Housing 2,017 1,859 6.0% 5.5%

Crowded Housing 1,220 1,200 3.6% 3.5%

Rent Burden Only 6,294 6,363 18.7% 18.7%

Any with No Problems 16,956 16,000 50.4% 47.1%

Income 0-30% HAMFI (1000) 9,077 9,729 100.0% 100.0%

Unassisted with Severe Problems 3,999 4,643 44.1% 47.7%

Unassisted with non-Severe Problems Only 1,145 981 12.6% 10.1%

Unassisted with No Problems 947 816 10.4% 8.4%

Assisted 2,986 3,289 32.9% 33.8%

Any with Severe Problems 5,136 6,151 56.6% 63.2%

Rent Burden >50% of Income 4,945 5,999 54.5% 61.7%

Severely Inadequate Housing 401 430 4.4% 4.4%

Rent Burden Onla 4,317 5,160 47.6% 53.0%

Any with non-Severe Problems Only 1,936 1,804 21.3% 18.5%

Rent Burden 30–50% of Income 1,664 1,535 18.3% 15.8%

Moderately Inadequate Housing 364 340 4.0% 3.5%

Crowded Housing 216 229 2.4% 2.4%

Rent Burden Only 1,383 1,263 15.2% 13.0%

Any with No Problems 2,005 1,775 22.1% 18.2%
—62—

Table A–4. Incidence of Housing Problems among Renters

by Relative Income, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

Income 30-50% HAMFI (1000) 6,581 6,342 100.0% 100.0%

Unassisted with Severe Problems 1,176 1,349 17.9% 21.3%

Unassisted with non-Severe Problems Only 2,860 2,604 43.5% 41.0%

Unassisted with No Problems 1,275 1,127 19.4% 17.8%

Assisted 1,270 1,262 19.3% 19.9%

Any with Severe Problems 1,344 1,548 20.4% 24.4%

Rent Burden >50% of Income 1,160 1,361 17.6% 21.5%

Severely Inadequate Housing 213 228 3.2% 3.6%

Rent Burden Onlya 1,059 1,233 16.1% 19.4%

Any with non-Severe Problems Only 3,458 3,253 52.5% 51.3%

Rent Burden 30–50% of Income 3,059 2,934 46.5% 46.3%

Moderately Inadequate Housing 474 417 7.2% 6.6%

Crowded Housing 403 346 6.1% 5.5%

Rent Burden Onlya 2,632 2,535 40.0% 40.0%

Any with No Problems 1,779 1,542 27.0% 24.3%

Income 50-80% HAMFI (1000) 7,460 7,488 100.0% 100.0%

Unassisted with Severe Problems 436 472 5.8% 6.3%

Unassisted with non-Severe Problems Only 2,254 2,363 30.2% 31.6%

Unassisted with No Problems 3,842 3,661 51.5% 48.9%

Assisted 929 992 12.5% 13.2%

Any with Severe Problems 476 532 6.4% 7.1%

Rent Burden >50% of Income 280 321 3.8% 4.3%

Severely Inadequate Housing 199 215 2.7% 2.9%

Rent Burden Onlya 265 289 3.6% 3.9%

Any with non-Severe Problems Only 2,529 2,727 33.9% 36.4%

Rent Burden 30–50% of Income 1,872 2,091 25.1% 27.9%

Moderately Inadequate Housing 497 488 6.7% 6.5%

Crowded Housing 349 347 4.7% 4.6%

Rent Burden Only 1,716 1,930 23.0% 25.8%

Any with No Problems 4,455 4,229 59.7% 56.5%
—63—

D a t a o n H o u s i n g P r o b l e m s

Table A–4. Incidence of Housing Problems among Renters

by Relative Income, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

Income 80-120% HAMFI (1000) 5,416 5,449 100.0% 100.0%

Unassisted with Severe Problems 158 264 2.9% 4.8%

Unassisted with non-Severe Problems Only 757 799 14.0% 14.7%

Unassisted with No Problems 3,942 3,832 72.8% 70.3%

Assisted 558 555 10.3% 10.2%

Any with Severe Problems 186 290 3.4% 5.3%

Rent Burden >50% of Income 64 147 1.2% 2.7%

Severely Inadequate Housing 122 142 2.3% 2.6%

Rent Burden Onlya 61 143 1.1% 2.6%

Any with non-Severe Problems Only 855 909 15.8% 16.7%

Rent Burden 30–50% of Income 413 452 7.6% 8.3%

Moderately Inadequate Housing 349 325 6.4% 6.0%

Crowded Housing 148 170 2.7% 3.1%

Rent Burden Only 376 428 6.9% 7.9%

Any with No Problems 4,375 4,249 80.8% 78.0%

Income >120% HAMFI (1000) 5,080 4,943 100.0% 100.0%

Unassisted with Severe Problems 117 132 2.3% 2.7%

Unassisted with non-Severe Problems Only 542 557 10.7% 11.3%

Unassisted with No Problems 3,952 3,804 77.8% 77.0%

Assisted 469 450 9.2% 9.1%

Any with Severe Problems 131 145 2.6% 2.9%

Rent Burden >50% of Income 29 61 0.6% 1.2%

Severely Inadequate Housing 102 84 2.0% 1.7%

Rent Burden Onlya 25 57 0.5% 1.2%

Any with non-Severe Problems Only 607 593 11.9% 12.0%

Rent Burden 30–50% of Income 200 226 3.9% 4.6%

Moderately Inadequate Housing 331 289 6.5% 5.8%

Crowded Housing 104 109 2.0% 2.2%

Rent Burden Only 187 207 3.7% 4.2%

Any with No Problems 4,342 4,204 85.5% 85.0%

Source: HUD-PD&R tabulations of AHS data.

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—64—

Table A–5. Incidence of Housing Problems among Very Low-Income Renters

by Household Type, 2003 and 2005—Number and Percentage

2003 2005 2003 2005

Elderly (1000) 3,273 3,587 100.0% 100.0%

Unassisted with Severe Problems 1,129 1,291 34.5% 36.0%

Unassisted with non-Severe Problems Only 519 528 15.9% 14.7%

Unassisted with No Problems 496 409 15.2% 11.4%

Assisted 1,129 1,358 34.5% 37.9%

Any with Severe Problems 1,431 1,722 43.7% 48.0%

Rent Burden >50% of Income 1,349 1,664 41.2% 46.4%

Severely Inadequate Housing 128 110 3.9% 3.1%

Rent Burden Onlya 1,222 1,484 37.3% 41.4%

Any with non-Severe Problems Only 869 937 26.6% 26.1%

Rent Burden 30–50% of Income 810 888 24.7% 24.8%

Moderately Inadequate Housing 99 97 3.0% 2.7%

Crowded Housing 2 9 0.1% 0.3%

Rent Burden Only 769 837 23.5% 23.3%

Any with No Problems 974 928 29.8% 25.9%

Families with Children (1000) 6,379 6,465 100.0% 100.0%

Unassisted with Severe Problems 1,849 2,324 29.0% 35.9%

Unassisted with non-Severe Problems Only 1,901 1,674 29.8% 25.9%

Unassisted with No Problems 834 676 13.1% 10.5%

Assisted 1,795 1,791 28.1% 27.7%

Any with Severe Problems 2,448 3,012 38.4% 46.6%

Rent Burden >50% of Income 2,307 2,904 36.2% 44.9%

Severely Inadequate Housing 241 238 3.8% 3.7%

Rent Burden Onlya 2,007 2,533 31.5% 39.2%

Any with non-Severe Problems Only 2,493 2,301 39.1% 35.6%

Rent Burden 30–50% of Income 2,101 1,948 32.9% 30.1%

Moderately Inadequate Housing 375 311 5.9% 4.8%

Crowded Housing 592 548 9.3% 8.5%

Rent Burden Only 1,603 1,501 25.1% 23.2%

Any with No Problems 1,439 1,153 22.6% 17.8%
—65—

D a t a o n H o u s i n g P r o b l e m s

Table A–5. Incidence of Housing Problems among Very Low-Income Renters

by Household Type, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

Non-elderly Disabled (expanded; 1000) 1,403 1,416 100.0% 100.0%

Unassisted with Severe Problems 511 542 36.4% 38.3%

Unassisted with non-Severe Problems Only 224 201 16.0% 14.2%

Unassisted with No Problems 100 95 7.1% 6.7%

Assisted 568 578 40.5% 40.8%

Any with Severe Problems 653 795 46.5% 56.1%

Rent Burden >50% of Income 606 762 43.2% 53.8%

Severely Inadequate Housing 76 79 5.4% 5.6%

Rent Burden Onlya 495 619 35.3% 43.7%

Any with non-Severe Problems Only 385 337 27.4% 23.8%

Rent Burden 30–50% of Income 335 305 23.9% 21.5%

Moderately Inadequate Housing 94 65 6.7% 4.6%

Crowded Housing 0 0 0.0% 0.0%

Rent Burden Only 291 272 20.7% 19.2%

Any with No Problems 364 285 25.9% 20.1%

Other Households (1000) 4,603 4,603 100.0% 100.0%

 Unassisted with Severe Problems 1,686 1,835 36.6% 39.9%

Unassisted with non-Severe Problems Only 1,361 1,182 29.6% 25.7%

Unassisted with No Problems 792 763 17.2% 16.6%

Assisted 764 823 16.6% 17.9%

Any with Severe Problems 1,948 2,170 42.3% 47.1%

Rent Burden >50% of Income 1,843 2,030 40.0% 44.1%

Severely Inadequate Housing 170 232 3.7% 5.0%

Rent Burden Onlya 1,652 1,758 35.9% 38.2%

Any with non-Severe Problems Only 1,647 1,482 35.8% 32.2%

Rent Burden 30–50% of Income 1,476 1,328 32.1% 28.9%

Moderately Inadequate Housing 271 284 5.9% 6.2%

Crowded Housing 26 18 0.6% 0.4%

Rent Burden Only 1,351 1,189 29.4% 25.8%

Any with No Problems 1,008 951 21.9% 20.7%

Source: HUD-PD&R tabulations of AHS data.

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—66—

Table A–6a. Housing Problems and Characteristics

of Very Low-Income Renters by Household Type, 2005

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Renter Households (1000) 16,072 3,587 6,465 912 1,416 3,691

Number of Children 13,257 0 13,257 0 0 0 

Number of Persons 36,813 4,445 23,808 2,145 1,922 4,494 

Children/Household 0.82 0.00 2.05 0.00 0.00 0.00

Persons/Household 2.29 1.24 3.68 2.35 1.36 1.22

Unassisted with Severe Problems 5,992 1,291 2,324 324 542 1,511 

Unassisted with non-Severe Problems Only 3,585 528 1,674 254 201 928 

Unassisted with No Problems 1,944 409 676 143 95 620 

Assisted 4,550 1,358 1,791 191 578 632 

Any with Severe Problems 7,699 1,722 3,012 394 795 1,776 

Rent Burden >50% of Income 7,360 1,664 2,904 368 762 1,662 

Severely Inadequate Housing 659 110 238 41 79 191 

Rent Burden Onlya 6,394 1,484 2,533 335 619 1,423 

Any with non-Severe Problems Only 5,056 937 2,301 340 337 1,142 

Rent Burden 30–50% of Income 4,468 888 1,948 313 305 1,015 

Moderately Inadequate Housing 756 97 311 51 65 233 

Crowded Housing 574 9 548 18 0 0 

Rent Burden Only 3,798 837 1,501 280 272 909 

Any with No Problems 3,317 928 1,153 178 285 773 
—67—

D a t a o n H o u s i n g P r o b l e m s

Table A–6a. Housing Problems and Characteristics

of Very Low-Income Renters by Household Type, 2005 (continued)

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Other Characteristics

One Person in Household 6,992 2,827 119 0 1,027 3,019 

Husband-Wife Family 3,127 456 2,081 486 103 0 

Female Head 10,064 2,419 4,649 446 814 1,736 

Minority Head 8,164 1,171 4,222 574 666 1,531 

AFDC/SSI Income 3,103 630 1,465 0 1,008 0 

Social Security Income 4,035 3,021 428 0 585 0 

Income Below 50% Poverty 3,741 679 1,742 130 326 865 

Income Below Poverty 8,440 1,655 3,931 334 982 1,538 

Income Below 150% of Poverty 12,697 2,703 5,758 567 1,285 2,384 

High School Graduate 10,647 2,014 4,057 631 895 3,050 

Two+ Years Post High School 2,483 500 675 169 171 968 

Earnings at Minimum Wage:

 At Least Half Time 7,844 290 4,267 732 184 2,371 

 At Least Full Time 6,216 188 3,516 610 102 1,801 

Earnings Main Source of Income 8,555 255 4,589 764 174 2,773 

Housing Rated Poor 955 87 464 49 102 252 

Housing Rated Good+ 11,861 3,040 4,447 663 1,060 2,651 

Neighborhood Rated Poor 1,380 95 743 82 135 324 

Neighborhood Rated Good+ 11,406 2,936 4,221 653 985 2,612 

Central Cities 7,505 1,504 2,968 386 692 1,955 

Suburbs 5,417 1,300 2,273 401 381 1,063 

Non-metropolitan Areas 3,149 783 1,224 126 344 672 

Northeast 3,538 1,056 1,228 177 389 687 

Midwest 3,331 766 1,202 147 331 886 

South 5,444 1,017 2,332 331 451 1,313 

West 3,759 748 1,703 257 246 805 

Source: HUD-PD&R tabulations of AHS data.

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—68—

Table A–6b. Housing Problems and Characteristics

of Extremely Low-Income Renters by Household Type, 2005

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Renter Households (1000) 9,729 2,447 3,787 386 1,131 1,980 

Number of Children 7,938 0 7,935 0 0 0 

Number of Persons 21,292 2,902 13,682 909 1,437 2,363 

Children/Household 0.82 0.00 2.10 0.00 0.00 0.00

Persons/Household 2.19 1.19 3.61 2.36 1.27 1.19

Unassisted with Severe Problems 4,643 1,010 1,823 209 472 1,129 

Unassisted with non-Severe Problems Only 981 198 464 54 93 172 

Unassisted with No Problems 816 201 233 33 48 301 

Assisted 3,289 1,037 1,266 90 518 378 

Any with Severe Problems 6,151 1,409 2,442 267 708 1,324 

Rent Burden >50% of Income 5,999 1,369 2,406 251 687 1,286 

Severely Inadequate Housing 430 78 151 29 64 109 

Rent Burden Onlya 5,161 1,223 2,072 233 553 1,081 

Any with non-Severe Problems Only 1,804 458 797 73 220 254 

Rent Burden 30–50% of Income 1,535 425 661 53 202 194 

Moderately Inadequate Housing 340 62 122 28 39 90 

Crowded Housing 229 8 213 8 0 0 

Rent Burden Only 1,263 394 480 44 181 164 

Any with No Problems 1,775 580 547 45 203 401 
—69—

D a t a o n H o u s i n g P r o b l e m s

Table A–6b. Housing Problems and Characteristics

of Extremely Low-Income Renters by Household Type, 2005 (continued)

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Other Characteristics

One Person in Household 4,715 2,048 104 0 893 1,670 

Husband-Wife Family 1,498 259 989 182 68 0 

Female Head 6,457 1,709 2,917 223 646 962 

Minority Head 4,960 875 2,527 256 526 776 

AFDC/SSI Income 2,523 534 1,155 0 833 0 

Social Security Income 2,720 2,029 252 0 439 0 

Income Below 50% Poverty 3,741 679 1,742 130 326 865 

Income Below Poverty 7,966 1,649 3,496 323 968 1,530 

Income Below 150% of Poverty 9,600 2,363 3,776 379 1,118 1,963 

High School Graduate 5,999 1,240 2,226 242 700 1,591 

Two+ Years Post High School 1,346 282 362 66 133 503 

Earnings at Minimum Wage:

 At Least Half Time 2,955 72 1,798 239 72 773 

 At Least Full Time 1,602 33 1,141 130 20 277 

Earnings Main Source of Income 3,885 92 2,213 282 87 1,211 

Housing Rated Poor 616 69 302 14 91 140 

Housing Rated Good+ 7,099 2,046 2,539 285 835 1,394 

Neighborhood Rated Poor 941 67 526 33 112 203 

Neighborhood Rated Good+ 6,779 1,971 2,324 295 782 1,406 

Central Cities 4,648 1,092 1,814 147 554 1,040 

Suburbs 3,149 852 1,251 181 311 554 

Non-metropolitan Areas 1,932 503 721 58 265 385 

Northeast 2,349 791 771 85 331 371 

Midwest 1,988 467 761 52 251 458 

South 3,322 710 1,369 165 344 733 

West 2,071 478 886 83 205 418

Source: HUD-PD&R tabulations of AHS data.

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—70—

Table A–7. Housing Problems and Characteristics

of Worst Case Renters by Household Type, 2005

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Renter Households (1000) 5,992 1,291 2,324 324 542 1,511 

Number of Children 4,724 0 4,724 0 0 0 

Number of Persons 13,421 1,626 8,366 778 734 1,917 

Children/Household 0.79 0.00 2.03 0.00 0.00 0.00

Persons/Household 2.24 1.26 3.60 2.40 1.35 1.27

Unassisted with Severe Problems 5,992 1,291 2,324 324 542 1,511 

Unassisted with non-Severe Problems Only — — — — — —

Unassisted with No Problems — — — — — —

Assisted — — — — — —

Any with Severe Problems 5,992 1,291 2,324 324 542 1,511 

Rent Burden >50% of Income 5,729 1,261 2,242 300 519 1,406 

Severely Inadequate Housing 521 82 176 36 52 176 

Rent Burden Onlya 4,971 1,116 1,956 274 430 1,196 

Any with non-Severe Problems Only — — — — — —

Rent Burden 30–50% of Income — — — — — —

Moderately Inadequate Housing — — — — — —

Crowded Housing — — — — — —

Rent Burden Only — — — — — —

Any with No Problems — — — — — —
—71—

D a t a o n H o u s i n g P r o b l e m s

Table A–7. Housing Problems and Characteristics

of Worst Case Renters by Household Type, 2005 (continued)

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Other Characteristics

One Person in Household 2,638 995 76 0 387 1,179 

Husband-Wife Family 1,088 168 713 168 39 0 

Female Head 3,718 866 1,667 181 302 703 

Minority Head 2,895 425 1,419 202 252 597 

AFDC/SSI Income 1,138 157 573 0 408 0 

Social Security Income 1,487 1,112 185 0 190 0 

Income Below 50% Poverty 1,861 371 846 62 155 428 

Income Below Poverty 3,983 697 1,826 179 417 863 

Income Below 150% of Poverty 5,314 1,080 2,218 268 511 1,237 

High School Graduate 4,080 766 1,470 230 365 1,250 

Two+ Years Post High School 1,043 199 304 64 77 399 

Earnings at Minimum Wage:

 At Least Half Time 2,560 86 1,329 244 51 849 

 At Least Full Time 1,630 48 912 163 22 484 

Earnings Main Source of Income 3,169 99 1,582 269 54 1,164 

Housing Rated Poor 439 40 211 9 54 124 

Housing Rated Good+ 4,278 1,060 1,525 257 374 1,061 

Neighborhood Rated Poor 540 30 286 29 50 145 

Neighborhood Rated Good+ 4,208 1,047 1,484 248 359 1,070 

Central Cities 2,909 584 1,100 145 252 828 

Suburbs 2,092 492 856 150 183 411 

Non-metropolitan Areas 991 215 367 29 107 272 

Northeast 1,354 369 477 70 141 298 

Midwest 1,152 228 416 39 144 324 

South 1,987 444 751 131 152 509 

West 1,500 250 681 84 105 380 

Source: HUD-PD&R tabulations of AHS data.

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—72—

Table A–8. Housing Problems and Characteristics

of Extremely Low-Income Worst Case Renters by Household Type, 2005

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Renter Households (1000) 4,643 1,010 1,823 209 472 1,129 

Number of Children 3,706 0 3,706 0 0 0 

Number of Persons 10,269 1,249 6,491 506 616 1,407 

Children/Household 0.80 0.00 2.03 0.00 0.00 0.00

Persons/Household 2.21 1.24 3.56 2.43 1.31 1.25

Unassisted with Severe Problems 4,640 1,010 1,820 209 472 1,129 

Unassisted with non-Severe Problems Only — — — — — —

Unassisted with No Problems — — — — — —

Assisted — — — — — —

Any with Severe Problems 4,643 1,010 1,823 209 472 1,129 

Rent Burden >50% of Income 4,545 987 1,808 193 461 1,096 

Severely Inadequate Housing 318 61 93 26 37 101 

Rent Burden Onlya 3,899 875 1,556 179 380 909 

Any with non-Severe Problems Only — — — — — —

Rent Burden 30–50% of Income — — — — — —

Moderately Inadequate Housing — — — — — —

Crowded Housing — — — — — —

Rent Burden Only — — — — — —

Any with No Problems — — — — — —
—73—

D a t a o n H o u s i n g P r o b l e m s

Table A–8. Housing Problems and Characteristics

of Extremely Low-Income Worst Case Renters by Household Type, 2005 (continued)

Total Elderly,

No Children

Families 

with 

Children

Other 

Families

Nonfamily 

Reporting 

SSI Income

Other

Non-family

Other Characteristics

One Person in Household 2,126 802 69 0 352 902 

Husband-Wife Family 794 125 531 107 30 0 

Female Head 2,920 688 1,333 117 247 535 

Minority Head 2,232 358 1,106 129 208 431 

AFDC/SSI Income 1,022 150 514 0 358 0 

Social Security Income 1,178 866 148 0 164 0 

Income Below 50% Poverty 1,861 371 846 62 155 428 

Income Below Poverty 3,847 694 1,706 175 412 860 

Income Below 150% of Poverty 4,590 980 1,819 205 472 1,115 

High School Graduate 3,019 555 1,098 138 321 907 

Two+ Years Post High School 749 143 211 37 63 294 

Earnings at Minimum Wage:

 At Least Half Time 1,621 41 900 138 31 511 

 At Least Full Time 768 16 511 67 8 166 

Earnings Main Source of Income 2,282 63 1,176 168 41 835 

Housing Rated Poor 351 39 167 2 54 89 

Housing Rated Good+ 3,279 808 1,195 166 318 793 

Neighborhood Rated Poor 454 30 238 19 45 122 

Neighborhood Rated Good+ 3,222 802 1,137 165 310 807 

In Central Cities 2,248 480 872 91 216 589 

Suburbs 1,621 384 652 99 162 324 

Non-metropolitan Areas 771 146 297 19 94 215 

Northeast 1,052 319 357 42 127 207 

Midwest 933 169 360 25 128 251 

South 1,570 336 615 98 130 391 

West 1,088 186 491 45 86 279 

Source: HUD-PD&R tabulations of AHS data. 

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—74—

Table A–9. Incidence of Housing Problems among Very Low-Income Renters

by Race and Ethnicity, 2003 and 2005—Number and Percentage

2003 2005 2003 2005

Non-Hispanic White (1000) 7,702 7,907 100.0% 100.0%

Unassisted with Severe Problems 2,758 3,098 35.8% 39.2%

Unassisted with non-Severe Problems Only 1,780 1,700 23.1% 21.5%

Unassisted with No Problems 1,306 1,175 17.0% 14.9%

Assisted 1,858 1,934 24.1% 24.5%

Any with Severe Problems 3,260 3,764 42.3% 47.6%

Rent Burden >50% of Income 3,113 3,596 40.4% 45.5%

Severely Inadequate Housing 248 306 3.2% 3.9%

Rent Burden Onlya 2,795 3,187 36.3% 40.3%

Any with non-Severe Problems Only 2,380 2,300 30.9% 29.1%

Rent Burden 30–50% of Income 2,162 2,098 28.1% 26.5%

Moderately Inadequate Housing 310 310 4.0% 3.9%

Crowded Housing 105 97 1.4% 1.2%

Rent Burden Only 1,989 1,904 25.8% 24.1%

Any with No Problems 2,062 1,843 26.8% 23.3%

Non-Hispanic Black (1000) 3,750 3,989 100.0% 100.0%

Unassisted with Severe Problems 1,040 1,336 27.7% 33.5%

Unassisted with non-Severe Problems Only 921 746 24.6% 18.7%

Unassisted with No Problems 443 388 11.8% 9.7%

Assisted 1,346 1,519 35.9% 38.1%

Any with Severe Problems 1,501 1,969 40.0% 49.4%

Rent Burden >50% of Income 1,398 1,880 37.3% 47.1%

Severely Inadequate Housing 169 181 4.5% 4.5%

Rent Burden Onlya 1,186 1,562 31.6% 39.2%

Any with non-Severe Problems Only 1,343 1,176 35.8% 29.5%

Rent Burden 30–50% of Income 1,147 1,046 30.6% 26.2%

Moderately Inadequate Housing 292 208 7.8% 5.2%

Crowded Housing 100 94 2.7% 2.4%

Rent Burden Only 962 886 25.7% 22.2%

Any with No Problems 906 843 24.2% 21.1%
—75—

D a t a o n H o u s i n g P r o b l e m s

Table A–9. Incidence of Housing Problems among Very Low-Income Renters

by Race and Ethnicity, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

Hispanic (1000) 3,260 3,167 100.0% 100.0%

Unassisted with Severe Problems 1,035 1,168 31.7% 36.9%

Unassisted with non-Severe Problems Only 1,070 928 32.8% 29.3%

Unassisted with No Problems 346 267 10.6% 8.4%

Assisted 809 805 24.8% 25.4%

Any with Severe Problems 1,301 1,496 39.9% 47.2%

Rent Burden >50% of Income 1,195 1,423 36.7% 44.9%

Severely Inadequate Housing 162 151 5.0% 4.8%

Rent Burden Onlya 1,053 1,234 32.3% 39.0%

Any with non-Severe Problems Only 1,370 1,256 42.0% 39.7%

Rent Burden 30–50% of Income 1,147 1,050 35.2% 33.2%

Moderately Inadequate Housing 194 169 6.0% 5.3%

Crowded Housing 372 328 11.4% 10.4%

Rent Burden Only 840 793 25.8% 25.0%

Any with No Problems 588 415 18.0% 13.1%

Source: HUD-PD&R tabulations of AHS data. 

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—76—

Table A–10. Incidence of Housing Problems among Very Low-Income Renters

by Region, 2003 and 2005—Number and Percentage

2003 2005 2003 2005

Northeast (1000) 3,444 3,538 100.0% 100.0%

Unassisted with Severe Problems 1,146 1,354 33.3% 38.3%

Unassisted with non-Severe Problems Only 701 600 20.4% 17.0%

Unassisted with No Problems 485 369 14.1% 10.4%

Assisted 1,111 1,215 32.3% 34.3%

Any with Severe Problems 1,507 1,829 43.8% 51.7%

Rent Burden >50% of Income 1,392 1,732 40.4% 49.0%

Severely Inadequate Housing 184 227 5.3% 6.4%

Rent Burden Onlya 1,218 1,457 35.4% 41.2%

Any with non-Severe Problems Only 1,043 964 30.3% 27.2%

Rent Burden 30–50% of Income 899 888 26.1% 25.1%

Moderately Inadequate Housing 150 106 4.4% 3.0%

Crowded Housing 103 91 3.0% 2.6%

Rent Burden Only 797 781 23.1% 22.1%

Any with No Problems 895 745 26.0% 21.1%

Midwest (1000) 3,327 3,331 100.0% 100.0%

Unassisted with Severe Problems 1,009 1,152 30.3% 34.6%

Unassisted with non-Severe Problems Only 858 704 25.8% 21.1%

Unassisted with No Problems 510 507 15.3% 15.2%

Assisted 950 968 28.6% 29.1%

Any with Severe Problems 1,266 1,450 38.1% 43.5%

Rent Burden >50% of Income 1,217 1,385 36.6% 41.6%

Severely Inadequate Housing 81 109 2.4% 3.3%

Rent Burden Onlya 1,105 1,232 33.2% 37.0%

Any with non-Severe Problems Only 1,182 1,025 35.5% 30.8%

Rent Burden 30–50% of Income 1,063 912 32.0% 27.4%

Moderately Inadequate Housing 152 135 4.6% 4.1%

Crowded Housing 73 60 2.2% 1.8%

Rent Burden Only 972 838 29.2% 25.2%

Any with No Problems 879 856 26.4% 25.7%
—77—

D a t a o n H o u s i n g P r o b l e m s

Table A–10. Incidence of Housing Problems among Very Low-Income Renters

by Region, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

South (1000) 5,294 5,444 100.0% 100.0%

Unassisted with Severe Problems 1,649 1,987 31.1% 36.5%

Unassisted with non-Severe Problems Only 1,470 1,320 27.8% 24.2%

Unassisted with No Problems 847 728 16.0% 13.4%

Assisted 1,328 1,410 25.1% 25.9%

Any with Severe Problems 2,063 2,570 39.0% 47.2%

Rent Burden >50% of Income 1,951 2,477 36.9% 45.5%

Severely Inadequate Housing 195 175 3.7% 3.2%

Rent Burden Onlya 1,683 2,156 31.8% 39.6%

Any with non-Severe Problems Only 1,906 1,759 36.0% 32.3%

Rent Burden 30–50% of Income 1,649 1,525 31.1% 28.0%

Moderately Inadequate Housing 391 331 7.4% 6.1%

Crowded Housing 198 175 3.7% 3.2%

Rent Burden Only 1,339 1,275 25.3% 23.4%

Any with No Problems 1,324 1,115 25.0% 20.5%

West (1000) 3,592 3,759 100.0% 100.0%

Unassisted with Severe Problems 1,371 1,500 38.2% 39.9%

Unassisted with non-Severe Problems Only 975 961 27.1% 25.6%

Unassisted with No Problems 380 340 10.6% 9.0%

Assisted 866 958 24.1% 25.5%

Any with Severe Problems 1,644 1,850 45.8% 49.2%

Rent Burden >50% of Income 1,546 1,766 43.0% 47.0%

Severely Inadequate Housing 155 148 4.3% 3.9%

Rent Burden Onlya 1,370 1,548 38.1% 41.2%

Any with non-Severe Problems Only 1,263 1,308 35.2% 34.8%

Rent Burden 30–50% of Income 1,112 1,144 31.0% 30.4%

Moderately Inadequate Housing 146 185 4.1% 4.9%

Crowded Housing 246 249 6.8% 6.6%

Rent Burden Only 907 904 25.3% 24.0%

Any with No Problems 686 601 19.1% 16.0%

Source: HUD-PD&R tabulations of AHS data. 

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—78—

Table A–11. Incidence of Housing Problems among Very Low-Income Renters

by Metropolitan Location, 2003 and 2005—Number and Percentage

2003 2005 2003 2005

Central Cities (1000) 7,466 7,505 100.0% 100.0%

Unassisted with Severe Problems 2,532 2,909 33.9% 38.8%

Unassisted with non-Severe Problems Only 1,869 1,674 25.0% 22.3%

Unassisted with No Problems 968 685 13.0% 9.1%

Assisted 2,096 2,237 28.1% 29.8%

Any with Severe Problems 3,194 3,769 42.8% 50.2%

Rent Burden >50% of Income 2,951 3,596 39.5% 47.9%

Severely Inadequate Housing 373 349 5.0% 4.7%

Rent Burden Onlya 2,560 3,053 34.3% 40.7%

Any with non-Severe Problems Only 2,546 2,433 34.1% 32.4%

Rent Burden 30–50% of Income 2,216 2,168 29.7% 28.9%

Moderately Inadequate Housing 401 382 5.4% 5.1%

Crowded Housing 332 298 4.4% 4.0%

Rent Burden Only 1,841 1,791 24.7% 23.9%

Any with No Problems 1,727 1,303 23.1% 17.4%

Suburbs (1000) 5,506 5,417 100.0% 100.0%

Unassisted with Severe Problems 1,987 2,092 36.1% 38.6%

Unassisted with non-Severe Problems Only 1,415 1,262 25.7% 23.3%

Unassisted with No Problems 767 698 13.9% 12.9%

Assisted 1,337 1,365 24.3% 25.2%

Any with Severe Problems 2,438 2,625 44.3% 48.5%

Rent Burden >50% of Income 2,342 2,533 42.5% 46.8%

Severely Inadequate Housing 176 188 3.2% 3.5%

Rent Burden Onlya 2,108 2,271 38.3% 41.9%

Any with non-Severe Problems Only 1,852 1,696 33.6% 31.3%

Rent Burden 30–50% of Income 1,657 1,505 30.1% 27.8%

Moderately Inadequate Housing 237 214 4.3% 4.0%

Crowded Housing 225 197 4.1% 3.6%

Rent Burden Only 1,425 1,311 25.9% 24.2%

Any with No Problems 1,216 1,097 22.1% 20.3%
—79—

D a t a o n H o u s i n g P r o b l e m s

Table A–11. Incidence of Housing Problems among Very Low-Income Renters

by Metropolitan Location, 2003 and 2005—Number and Percentage (continued)

2003 2005 2003 2005

Non-metropolitan (1000) 2,685 3,149 100.0% 100.00%

Unassisted with Severe Problems 657 991 24.5% 31.5%

Unassisted with non-Severe Problems Only 720 649 26.8% 20.6%

Unassisted with No Problems 486 561 18.1% 17.8%

Assisted 823 949 30.7% 30.1%

Any with Severe Problems 848 1,305 31.6% 41.4%

Rent Burden >50% of Income 812 1,232 30.2% 39.1%

Severely Inadequate Housing 65 122 2.4% 3.9%

Rent Burden Onlya 709 1,070 26.4% 34.0%

Any with non-Severe Problems Only 996 927 37.1% 29.4%

Rent Burden 30–50% of Income 850 796 31.7% 25.3%

Moderately Inadequate Housing 200 160 7.4% 5.1%

Crowded Housing 63 80 2.3% 2.5%

Rent Burden Only 748 696 27.9% 22.1%

Any with No Problems 841 917 31.3% 29.1%

U.S. Total (1000) 15,658 16,072 100.0% 100.0%

Unassisted with Severe Problems 5,176 5,992 33.1% 37.3%

Unassisted with non-Severe Problems Only 4,004 3,585 25.6% 22.3%

Unassisted with No Problems 2,222 1,944 14.2% 12.1%

Assisted 4,256 4,550 27.2% 28.3%

Any with Severe Problems 6,480 7,699 41.4% 47.9%

Rent Burden >50% of Income 6,105 7,360 39.0% 45.8%

Severely Inadequate Housing 615 659 3.9% 4.1%

Rent Burden Onlya 5,376 6,394 34.3% 39.8%

Any with non-Severe Problems Only 5,394 5,056 34.4% 31.5%

Rent Burden 30–50% of Income 4,722 4,468 30.2% 27.8%

Moderately Inadequate Housing 839 756 5.4% 4.7%

Crowded Housing 619 574 4.0% 3.6%

Rent Burden Only 4,014 3,798 25.6% 23.6%

Any with No Problems 3,784 3,317 24.2% 20.6%

Source: HUD-PD&R tabulations of AHS data. 

a

 The estimates for “rent burden only” exclude households with any non-severe problem.
—80—

Table A–12. Households Occupying U.S. Rental Units,

by Affordability of Rent and Income of Occupants, 2003 and 2005

Relative Income of 

Households

Occupied and Vacant Rental Units (thousands) by Unit Affordability Category

(percent of HAMFI needed to afford the highest rent in the category)

2005 10* 20 30 40 50 60 70 80 90 100 110 120+ Total

Extremely Low Income

(≤30% HAMFI) 805 1,610 1,163 1,630 1,828 1,167 618 349 134 112 70 240 9,726

Very Low Income 

(30-50%) 260 263 537 1,078 1,593 1,173 670 338 105 92 33 204 6,345

Low Income 

(50-80%) 295 261 326 1,049 1,636 1,617 1,038 586 212 146 94 227 7,488

Middle Income or 

higher (>80%) 326 266 231 710 1,497 2,039 1,595 1,260 567 488 365 1,048 10,391

Total, 2005 1,686 2,400 2,257 4,467 6,554 5,995 3,921 2,534 1,018 838 562 1,719 33,951

Vacant units for rent, 

2005 151 91 162 495 851 759 503 332 186 119 73 251 3,974

 2003 

Extremely Low Income

(≤30% HAMFI) 845 1,490 1,197 1,533 1,664 1,109 603 289 81 71 61 134 9,077

Very Low Income 

(30-50%) 255 351 590 1,330 1,632 1,165 588 325 86 93 62 104 6,581

Low Income 

(50-80%) 319 269 371 1,165 1,676 1,612 914 510 182 145 90 207 7,460

Middle Income or 

higher (>80%) 324 303 320 818 1,656 2,068 1,632 1,221 571 431 308 844 10,496

Total, 2003 1,744 2,413 2,478 4,846 6,629 5,954 3,737 2,345 920 740 521 1,289 33,614

Vacant units for rent, 

2003 147 91 226 569 820 727 451 303 159 99 86 285 3,963

Source: HUD-PD&R tabulations of AHS data.

* The 10 percent of HAMFI category includes units occupied with no cash rent.
—81—

D a t a o n H o u s i n g P r o b l e m s

Table A–13. Renters and Rental Units Affordable and Available to Them, 

by Relative Income, 1991–2005

 1991 1993 1995 1997 1999 2001c 2003 2005

Renter Households (1000) 33,351 33,472 34,150 34,000 34,007 34,042 33,614 33,951

Extremely Low Income (≤30% HAMFI) 8,392 8,761 8,637 9,215 8,513 8,739 9,077 9,979

Very Low Income (30-50%) 5,770 5,995 5,897 5,889 6,243 6,315 6,581 6,345

Low Income (50-80%) 6,933 6,383 7,205 6,591 7,270 7,251 7,460 7,488

Middle Income or higher (>80%) 12,256 12,334 12,411 12,305 11,981 11,737 10,496 10,139 

Affordable Unitsa (1000) 36,232 36,361 36,924 37,186 37,018 37,197 37,577 37,924

Extremely Low Income (≤30% HAMFI) 7,160 7,033 6,633 6,937 6,683 6,870 7,098 6,025

Very Low Income (30-50%) 10,693 10,340 9,933 10,826 12,089 12,366 12,863 11,006

Low Income (50-80%) 13,880 14,284 15,389 15,012 14,222 13,634 13,518 12,842

Middle Income or higher (>80%) 4,499 4,704 4,969 4,411 4,023 4,328 4,099 4,410 

Affordable and Available Unitsb (1000) 36,232 36,361 36,924 37,186 37,018 37,197 37,577 37,924

Extremely Low Income (≤30% HAMFI) 4,104 4,074 3,790 3,901 3,573 3,803 3,996 3,536

Very Low Income (30-50%) 7,231 7,230 6,799 7,304 7,905 8,132 8,744 7,546

Low Income (50-80%) 10,947 10,994 12,026 11,882 11,841 11,665 12,396 11,685

Middle Income or higher (>80%) 13,949 14,063 14,310 14,100 13,700 13,597 12,441 11,516 

Source: HUD-PD&R tabulations of AHS data.

a

 Affordable units are rental units, whether vacant or occupied, that rent for no more than 30 percent of specified income levels (relative to the HUDadjusted area median family income).

b Affordable and available units are rental units that are affordable as described above, and that also are either currently available for rent or are 

already occupied by a household with the specified income level.

c

 2001 estimates are based on 1990 Census weights rather than the 2000 weights used elsewhere in this report.
—82—

Table A–14. Average Income and Average Gross Rent of Renter Households 

by Relative Income, 2003 and 2005

Household Income as Percentage 

of HUD-Adjusted Area Median Family Income

2005 0–30% 30–50% 50–80% 80–120% >120% All Incomes

Total Households (1000) 9,729 6,342 7,488 5,449 4,943 33,951

Unassisted with Priority Problems 4,643 1,349 472 264 132 6,860

Unassisted with Other Problems 981 2,604 2,363 799 557 7,303

Unassisted with No Problems 816 1,127 3,661 3,832 3,804 13,240

Assisted 3,289 1,262 992 555 450 6,547

Average Monthly Income $653 $1,741 $2,762 $4,021 $7,913 $2,919

Unassisted with Priority Problems 648 1,624 2,651 3,628 6,533 1,206

Unassisted with Other Problems 983 1,813 2,764 4,060 7,969 2,724

Unassisted with No Problems 418 1,749 2,757 4,031 7,915 4,377

Assisted 620 1,712 2,827 4,082 8,231 1,981

Average Gross Rent $564 $641 $683 $797 $1,016 $709

Unassisted with Priority Problems 647 935 1,281 1,594 1,670 805

Unassisted with Other Problems 401 584 776 973 1,405 732

Unassisted with No Problems 444 390 534 702 934 693

Assisted 508 609 686 792 1,004 612

 2003

Total Households (1000) 9,077 6,581 7,460 5,416 5,080 33,614

Unassisted with Priority Problems 3,999 1,176 436 158 117 5,887

Unassisted with Other Problems 1,145 2,860 2,254 757 542 7,557

Unassisted with No Problems 947 1,275 3,842 3,942 3,952 13,958

Assisted 2,986 1,270 929 558 469 6,211

Average Monthly Income $666 $1,706 $2,671 $3,976 $8,320 $3,005

Unassisted with Priority Problems 673 1,596 2,564 3,864 6,630 1,201

Unassisted with Other Problems 950 1,740 2,630 4,022 7,238 2,509

Unassisted with No Problems 424 1,779 2,705 3,965 8,491 4,459

Assisted 624 1,659 2,683 4,028 8,560 2,048

Average Gross Rent $519 $587 $637 $711 $915 $650

Unassisted with Priority Problems 607 879 1,122 1,160 1,065 724

Unassisted with Other Problems 394 553 731 928 1,204 669

Unassisted with No Problems 434 389 520 647 869 647

Assisted 461 551 630 716 921 562

Source: HUD-PD&R tabulations of AHS data.
—83—

C o n c e p t s a n d M e t h o d o l o g y

Appendix B. Data Source, Concepts, and Methodology 

Used to Estimate Worst Case Needs 

To accurately estimate worst case needs for federal rental assistance from 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, also termed AMI)), 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 preference in tenant selection for

assistance (rent burdens exceeding 50 percent of income, substandard housing, or

being involuntarily displaced).

This appendix discusses the essential concepts and methods used to produce estimates

and tabulations of worst case needs using 2001 and 2003 AHS microdata. The discussion also highlights limitations of the data and issues relating to the consistency

of estimates in this report with those in previous reports on worst case needs.

American Housing Survey (AHS)

Description—The AHS is conducted by the U.S. Census Bureau to obtain housing statistics for the U.S. Department of Housing and Urban Development. The

data include information about occupants, the units, housing costs and financing,

and numerous other related variables. The Census Bureau’s field representatives

interviewed occupants of homes, and obtained information on vacant homes from

informed people such as landlords, rental agents, or informed neighbors. The 2005

AHS survey consisted of 56,650 interviews conducted between late April and midSeptember 2005.42

Changes in the survey instrument for 2005—In 2005, the AHS included a much

more elaborate series of questions for income than were asked previously, very similar to the questionnaire used in the Census Bureau’s American Community Survey.

For each person in the family, the 2005 questionnaire collected the amount of nine

different types of income, such as wages and salaries or Social Security.

The 2005 AHS continued to allow respondents to report multiple race categories, a

change first implemented in the 2003 AHS. Other changes to the survey instrument

are unlikely to have affected the estimates on affordable housing needs included in

this report.

Weighting—Because the AHS is based on a sample of housing units rather than a

census of all housing units, estimates based on the data must be “weighted up” so

that totals for each year match independent estimates of the total housing stock and

better represent the full housing stock. The Census Bureau weights up responses to

account for undercoverage of households (about 2.2 percent) and household nonre42 U.S. Census Bureau (2006, page v).
—84—

sponse (about 11 percent). The weights for 2001–2005 AHS data used in this report

are based on the 2000 Census of Housing, with adjustments for estimated change

since then.

Exclusions from the AHS Data

Households reporting incomes that are zero or negative are excluded from estimates

of worst case needs, although they are included in counts of total households. If

such households pay rents greater than the fair market rent while reporting zero or

negative incomes, then their income situation is presumably temporary, so they are

included and higher incomes are imputed to them.

Household and Family Types

Family—The “families” eligible for HUD rental assistance programs include

households with relatives, households with children, elderly single persons age 62 or

older, and single persons with disabilities. In this report, however, the term “family”

refers only to “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 householder or spouse is age 62 or older, and no

children are present.

Other families—Households with a nonelderly householder and no children in

which either one or more persons is related to the householder by birth, marriage, or

adoption, or one or more subfamilies reside there that have members related to each

other by birth, marriage, or adoption.

Nonfamily households—Households with a single nonelderly person living alone

or only with non-relatives. The “other nonfamily” subgroup appearing in Table A-7a

and others accounts for a significant proportion, 25 percent, of households with

worst case needs, even after excluding those with disabilities as discussed below.

Most of these households are either men living alone or women living alone.

Households having adult members with disabilities—This category conceptually

ought to include all nonelderly households with adults with significant physical or

mental disabilities. Unfortunately, no available data source counts these households

perfectly. The AHS proxy used in previous reports was an underestimate because it

counted only non-elderly single persons living alone or with non-relatives who report

receiving Supplemental Security Income (SSI) income.

Based on research that used data from the 1995 AHS supplement on physical disabilities, this report uses an expanded proxy. HUD program data suggest that this

expanded proxy likewise undercounts disabled households, as the program data show

appreciably more households (without children) having members with disabilities
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receiving rental assistance.43 These issues are discussed extensively in a previous worst

case needs report (HUD 2003, A-46). The SIPP data presented in Chapter 3 of this

report measure disability directly, and estimates of non-elderly households with disabilities produced with the SIPP data are similar to estimates produced with the AHS.

Housing Problems

Rent or cost burden—A ratio between housing costs (including utilities) and household income that exceeds 30 percent, which is a conventional standard for housing

affordability. To the extent that respondents underreport total income, the AHS

estimates may overcount the number of households with cost burden. A “severe” cost

burden exceeds 50 percent of reported income. A “moderate” cost burden exceeds

30 percent but is less than or equal to 50 percent of reported income. Cost burdens

only qualify as potential worst case needs if they are severe rent burdens. Households

reporting zero or negative income are defined as having no cost burden.

Inadequate housing—Housing with severe or moderate physical problems, as

defined in the AHS since 1984.44 Severe inadequacies constitute potential worst case

needs but moderate inadequacies do not. Briefly, a unit is defined as having severe

physical inadequacies 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.

•	 Electrical. Having no electricity or having all of the following three electrical

problems: exposed wiring, a room with no working wall outlet, and three or

more blown fuses or tripped circuit breakers in the last 90 days.

•	 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.

43 Social Security Administration (SSA) data on SSI recipients who are blind or have other

disabilities provide a basis for making more complete estimates of the number of very low-income

renters with SSI income who receive HUD assistance or who have a severe rent burden. But even

the SSA data are incomplete because they exclude very low-income persons with disabilities who

have incomes above SSI cutoffs. HUD (2001) estimated that 1.1 million worst case households

included persons with disabilities. This estimate was made by increasing the AHS expanded proxy

estimates to account for both known sources of undercount.

44 The AHS rates housing units using a three-level measure: adequate, moderately inadequate, and

severely inadequate. The questions underlying definitions of inadequate housing were changed in the

1997 AHS questionnaire to improve accuracy. For detail, see the entry for the variable ZADEQ in

the Codebook for the American Housing Survey, Public Use File: 1997 and Later. The most recent

version is available for download at http://www.huduser.org/datasets/ahs/ahsprev.html.
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•	 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.

A unit has moderate inadequacies if it has any of the following five problems, but

none of the above severe problems:

•	 Plumbing. Having all toilets break down simultaneously at least three times in

the last 3 months for at least 3 hours each time.

•	 Heating. Having unvented gas, oil, or kerosene heaters as the main source of

heat (because these heaters may produce unsafe fumes and unhealthy levels of

moisture).

•	 Upkeep. Having any three of the six upkeep problems mentioned under severe

inadequacies.

•	 Hallways. Having any three of the four hallway problems mentioned under

severe inadequacies.

•	 Kitchen. Lacking a sink, range, or refrigerator for the exclusive use of the unit.

Overcrowding—The condition of having more than one person per room in a residence. Overcrowding is counted as a moderate problem rather than a severe problem

that constitutes a potential worst case need.

“Priority” 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. These

problems informed the original definition of worst case needs. Because the AHS

sample tracks housing units and thus cannot count the homeless, AHS estimates of

priority problems are limited to the two severe problems described above: severe rent

burdens greater than 50 percent of income or severe physical problems. In accord

with the intention to estimate the number of unassisted very low-income renters

with priority problems, a number of tables in Appendix A classify households with a

combination of moderate problems and severe problems as having severe problems.

Income Measurement

Income sources—Income means gross income reported by AHS respondents for

the 12 months preceding the interview. In 2005, the AHS included a much more

elaborate series of questions for income than were asked previously, very similar to

the questionnaire used in the Census Bureau’s American Community Survey. For

each person in the family, the 2005 questionnaire collected the amount of nine different types of income. Income 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. Imputed income from equity is not included as income

in this report. Following HUD rules for determining income eligibility for HUD
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programs, the earnings of teenagers aged 17 years and younger are not counted as

income for this report.

Supplemental and in-kind income sources—Beginning with the 1999 AHS, poorer

renters with high rent burdens were asked several new questions about whether persons

outside the household contributed to household expenses such as rent, food, and

child care. The supplemental questions were asked of assisted renters who paid more

than 35 percent of their reported income for rent, and of unassisted renters with household income below $10,000 who paid more than 50 percent of their income for rent.

When they were asked these additional questions at the end of the interview, a small

number of renters corrected their earlier income and/or rent responses in the 1999

AHS. Analysis by the Census Bureau shows that respondents representing at most

250,000 unassisted very low-income renters changed either their income or rent

responses in ways that would tend to reduce their rent burden. Although the revised

responses should provide more accurate estimates of worst case needs, the results

would not be directly comparable to earlier worst case estimates. A previous worst

case needs report (HUD 2003) assumed that all of the 250,000 renters changing their

responses in 1999 would otherwise have had severe rent burdens. The estimates in

this report likewise are based on original rather than revised survey responses.

Family income—Reported income from all sources for the householder (the first

household member 18 years or older who is listed as an 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

18 or older.

Income Categories

HUD-adjusted area median family income and official income limits—HUD

is required by law to set income limits each year that determine the eligibility of

applicants for assisted housing programs. 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.45

The HUD-adjusted area median family income (HAMFI) is also referred to as the

area median income (AMI), although the latter term may be subject to misinterpretation. It should be noted that income limits are based on median family income,

not median household income. Each base income cutoff is assumed to apply to a

household of four, and official income limits 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. Each household is

assigned to an income category using the income limit appropriate to its area and the

number of household members.

45 See HUD (2005b) for a description of current adjustments.
—88—

Statutory adjustments to official income limits in 1999 included upper caps and

lower floors for areas with low or high ratios of housing costs to income and, for each

nonmetropolitan county, a lower floor equal to its state’s nonmetropolitan average.

These statutory adjustments do not apply for 2001–2005 estimates.

Income cutoffs in association with AHS geography—To categorize households in

relation to “local” income limits as accurately as possible within the limitations of

the geography given on the AHS public use files, HUD compares household incomes

to area income limits. Very low- and low-income cutoffs for a household of four are

defined for each unit of geography identified on the AHS national microdata tapes.

For housing units outside these metropolitan areas, 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 population based on the

decennial census.

Because developing estimates of official income limits for the geography identified

on the AHS microdata is time-consuming, HUD has prepared income limits to use

with AHS geography only for 4 years: 1978, 1986, 1995, and 2003.46 AHS estimates

for other years have used these limits adjusted for inflation rather than the official

income limits. In this report, 2001 income cutoffs are based on 1995 income limits,

weighted by 1990 census data, and adjusted for inflation by the Consumer Price Index for urban consumers as well as by the factor by which average income exceeded

inflation over this period, 1.1238. Income cutoffs for 2003 and 2005 are based on

HUD’s official income limits for those years, weighted by 2000 census data.

Categorizing households by income—For this report, when households are

categorized using the very low- and low-income cutoffs, the cutoffs are adjusted for

household size using the same adjustment factors used by HUD programs.

In addition, households reporting negative income are attributed incomes just above

the area median income if their monthly housing costs exceed the Fair Market Rent

and they lived in adequate and uncrowded housing. The justification for imputing

higher incomes is that many households in this situation live in housing with amenities such as dining rooms, balconies, and off-the-street parking and thus may be

reporting temporary accounting losses.

For housing needs estimates using AHS data since 1985, HUD has classified households with incomes above median income by comparing their income to the actual

median family income for the location, rather than to 80 percent of the low-income

cutoff, as was the only approach possible for estimates made through 1983.

•	 Extremely low income—Income not in excess of 30 percent of HAMFI. In

2005, 15.8 percent of AHS households reported income below 30 percent of

HAMFI.

46 For each of these years, HUD revised income limits for all locations in the country based on

income data from the most recent decennial Census of Population and Housing.
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•	 Very low income—Income not in excess of 50 percent of HAMFI. Very low

income thus includes extremely low income, although the term sometimes is

used loosely in specific contexts, such as mismatch analysis, to mean incomes

between 30 and 50 percent of HAMFI. In 2005, 28.6 percent of AHS households reported income below the very low-income cutoffs.

•	 Low income—Reported income not in excess of 80 percent of HAMFI or,

if lower, the national median family income. In 2005, 46.3 percent of AHS

households reported incomes that fell below the low-income cutoffs.

•	 Poor—Household income below the national poverty cutoffs for the United

States for that household size. (As discussed in Appendix A of the Census Bureau’s

AHS publications, AHS poverty estimates differ from official poverty estimates

made from the Current Population Survey. AHS poverty estimates are based on

income of households rather than income of families or individuals, and AHS

income questions are much less detailed and refer to income during the past

12 months rather than a fixed period.) The poverty cutoff for a family of four

approximates 33 percent of HAMFI. In 2003, 49 percent of very low-income

households and 79 percent of extremely low-income households were poor.

•	 Middle income—For this report, incomes above 80 percent and below 120 percent of HAMFI. In 2005, 19.0 percent of AHS households were in this category.

•	 Upper income—For this report, households with income above 120 percent of

HAMFI. In 2005, 34.7 percent of households were in this category.

Housing Assistance Status

In 1997 the AHS questions intended to identify households receiving rental assistance were changed in both content and order from those used earlier. After careful

review, HUD and the Census Bureau adopted the following procedure to identify

assisted units in a way that produces results that are more comparable to pre-1997 data.

•	 Identify units as “owned by a public housing authority” if the respondent

answers yes to, “Is the building owned by a public housing authority?”

•	 Identify units as receiving “government subsidy” if the respondent either was

assigned to that unit by an agency such as a public housing authority or answers

yes that “a public housing authority, or some similar agency, [gave them] a

certificate or voucher to help pay the rent for the unit.”

•	 Identify units as “other, income verification” units if the respondent answers

yes to, “As part of your rental agreement do you need to answer questions about

your income whenever your lease is up for renewal?” and, as a follow-up, says

that they report their income to either “a building manager or landlord” or “a

public housing authority or a state or local housing agency.”

•	 Include units if the respondent answers “yes” to, “Does the state or local government pay some of the cost of the unit?”
—90—

•	 Include units if the respondent answers yes to one of the following three 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?”

Location

Metropolitan Statistical Area—From 1973 to 1983, the definitions of metropolitan

location in AHS data corresponded to the 243 Standard Metropolitan Statistical

Areas 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.

Longitudinal Analysis

This worst case report includes, for the first time, an exploratory, longitudinal

analysis that assesses whether very low-income renters who have severe rent burdens

in one year remain in similar status a year later. The analysis, presented in Chapter 3,

uses data from the Survey of Income and Program Participation.

The SIPP design does not accurately assign or track household rent burden over time.

Rent and income are tracked at the level of the individual, who may or may not be a

part of the same household in both years. Therefore, rather than using “households”

as the unit of analysis, the longitudinal analysis in Chapter 3 focuses on persons

who were in the data file and were heads of households in both years. Persons were

assigned to income categories on the basis of their incomes during the first year.

Mismatch of Supply and Demand for Affordable Rental Housing

Mismatch—The discrepancy between the number of rental units needed by renters

of various income categories and the number provided by the market that are affordable at those income levels.

Affordability—Several federal rental programs define “affordable” rents as those

requiring not more than 30 percent of an income cutoff defined in relation to

HAMFI. Under the Low Income Housing Tax Credit (LIHTC), for example, 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 define three categories of affordability (ELI, VLI, and

LI) based on the incomes that are sufficient for the rents: at or below 30 percent of

HAMFI, above 30 and up to 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 used to define rent affordability are adjusted for number of bedrooms using the formula codified at 26 U.S.C. 42(g)(2)(C): no bedrooms, 70 percent
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of base; one bedroom, 75 percent; two bedrooms, 90 percent; three bedrooms, 104

percent; four bedrooms, 116 percent, plus 12 percent of base for every additional

bedroom.47 This formula assumes that an efficiency unit houses one person, a onebedroom unit houses 1.5 persons, and each additional bedroom houses another 1.5

persons. For vacant units, the costs of any utilities that would be paid by an occupant

were allocated using a “hot deck” technique based on a matrix of structure type,

AHS climate code, and eight categories of gross rent.

Three measures of affordability—Three measures are used in Chapter 4 to analyze

the sufficiency of the rental housing stock in relation to household incomes.

•	 Affordability measures the extent to which there are enough rental housing units

of different costs to provide each household with a unit it can afford (based on

the 30 percent of income standard). Affordability is the broadest measure of

housing stock sufficiency, addressing whether there are sufficient housing units

if allocated solely on the basis of cost. The affordable stock includes both vacant

and occupied units.

•	 Availability measures the extent to which affordable rental housing units are

available to households within a particular income range. Some households that

are not of lower income choose to spend less than 30 percent of their incomes

on rent, occupying housing that is affordable to households of lower income.

Such housing units are thus not available to the lower-income households. A

unit is available at a given level of income if it is affordable at that level, and is

either: (1) occupied by a household with that income or less or (2) vacant.

The availability measure removes units from consideration if they have artificially

low rents because they are occupied as a benefit of employment (for example, by

caretakers) or because they are owned by relatives or friends of the occupants. The

2003 AHS data indicate that 2.2 million renter households (6.6 percent) occupied

their units while paying no rent. The AHS does not provide estimates of the number

of households paying a positive but below-market rent because of employment or

other reasons.

•	 Adequacy extends the concept of availability by considering whether sufficient

rental units are physically adequate as well as available and affordable.

Categorizing rental units by affordability and households by income—For the

analysis of mismatches between affordability and income in Chapter 4, household

incomes and housing unit rents were compared to 2003 income limits (for income

and rent categories up to and including 80 percent of HAMFI) and to the actual

median family incomes (for categories above 80 percent of HAMFI). As in the

analysis of household income, households reporting negative income were redefined

47 Note that this adjustment procedure is similar to, but distinct from, the adjustment of income limits

described under Income Categories.
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as having incomes just above median income if their monthly housing costs were

above the FMR and they lived in adequate and uncrowded housing.

This approach provides more accurate estimates than in previous reports of the numbers of housing units qualifying as affordable under rules such as those regulating

the HOME program and the low-income housing tax credit. For the LIHTC, housing

that is affordable to incomes at 60 percent of median income must have rents that are

no more than 30 percent of 120 percent of HUD’s applicable VLI limits (with appropriate adjustments for the number of bedrooms). For ease of calculation, analyses of

shortages of affordable housing in previous worst case reports had compared income

and rents to multiples of HAMFI. However, the statutory adjustments made in

deriving HUD’s official VLI limits on average make the actual VLI limits higher than

“50 percent” of median income. Therefore, the previous data tended to undercount

both the number of renters and the number of units defined as affordable to them.

For purposes of mismatch analysis, units with “no cash rent” reported are categorized solely on the basis of utility costs. Utility costs are allocated to vacant units

through “hot-deck” imputation based on units that are comparable on the basis of

cost, number of units, region, and tenure.

Race and Ethnicity

In 2003, the AHS began using revised Census Bureau categories of race and

ethnicity that are not directly comparable with the 2001 and earlier AHS. Survey

respondents now are allowed to select more than one racial group, causing slight but

significant decreases in the size of previously monolithic categories.

Worst Case Needs for Rental Assistance

Unassisted very low-income renters with the priority housing problems that formerly

gave them preference for admission to federal rental assistance programs. Because

AHS questions do not distinguish federal from state or local assistance, assisted

renters include those with state or local assistance.
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Appendix C. Comparison of AHS with ACS and Joint 

Center for Housing Studies Report, State of the Nation’s 

Housing 2006

The tables that follow compare Table A-6 of State of the Nation’s Housing 2006, a

report of the Joint Center for Housing Studies (JCHS) with corresponding tabulations from the AHS. Table A-6 presents the distribution of households by tenure,

income quantile, and housing cost burden using data from the 2001 and 2004

American Community Survey. This comparison uses the same breakdown of income

groups as the Joint Center report, using data from the 2001 and 2005 AHS.

The JCHS table covers a 3 year period, while the AHS table covers 4 years.

The AHS shows about a million more total households in both the beginning and

ending years. By tenure, the AHS has about 2 million more rental households but

one million fewer owner households.

Both data sources show increases in the number of renter households with severe

rent burden in all income quantiles, except the highest (top quartile). The AHS shows

larger increases, except for the lower-middle quintile. The biggest difference is in the

bottom decile, where the AHS shows 495,000 more severely burdened households,

while the ACS shows only 391,000 more. The difference is 104,000, about a quarter

of the ACS estimate. All other quantiles show smaller differences, in terms of household numbers and percent.

A comparison of the percentage distribution of renter households by burden within

each income quantile reveals that the AHS consistently shows a higher percentage

with severe rent burden, in both years. In terms of changes in the distributions, the

ACS and AHS show the same direction of change, except for some of the burden

classes in the upper-middle income quartile. The AHS generally shows larger percentage-point increases of moderately and severely burdened households, although

there are some exceptions.

Generally, the AHS and ACS show a similar trend. The changes in burdened

households are generally in the same direction, and the percentage distributions are

similar.
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Renters With Severe Rent Burden, AHS

Renters (1,000) 2001 2005 Change, 2001–2005

Bottom Decile 4,292 4,788 495

Bottom Quintile 6,510 7,256 746

Bottom Quartile 7,000 7,888 888

Lower-Middle Quartile 529 678 149

Upper-Middle Quartile 102 173 70

Top Quartile 0

Total 7,631 8,738 1,108

Renters With Severe Rent Burden, ACS

Renters (1,000) 2001 2005 Change, 2001–2004

Bottom Decile 4,559 4,950 391

Bottom Quintile 6,550 7,234 684

Bottom Quartile 6,901 7,741 840

Lower-Middle Quartile 419 597 178

Upper-Middle Quartile 39 60 21

Top Quartile 2 2 0

Total 7,361 8,400 1,039

Difference Between AHS and ACS Household Counts of Renters with Severe Rent Burden

Renters (1,000) AHS 2001 Minus 

ACS 2001

AHS 2005 Minus 

ACS 2004

AHS Change (2001-2005) Minus 

ACS Change (2001-2004)

Bottom Decile -267 -162 104

Bottom Quintile -40 22 62

Bottom Quartile 99 147 48

Lower-Middle Quartile 110 81 -29

Upper-Middle Quartile 63 113 49

Top Quartile -2 -2 0

Total 270 338 69