On March 18, 2021, the National Low Income Housing Coalition (NLIHC) released the 2021 update of its annual report, The Gap: A Shortage of Affordable Homes. On the same day, the U.S. Department of Housing & Urban Development (HUD) released the 2020 Annual Homeless Assessment Report, Part 1 to Congress. Taken together, the content in these reports provide national and local data on both the demand for assistance across the housing continuum, from homelessness to housing instability, and the supply that is available to meet that need.
Although not surprising, a major trend for both reports is that housing instability and homelessness are each increasing while the supply of available and affordable housing is dwindling. In fact, these trends predated COVID-19; they will likely continue to worsen because of the long-term economic impacts of the pandemic. The data in the reports further underscores the need for both broad and deep housing assistance, especially for households of color and those with the lowest incomes.
In addition, communities, like Charlotte-Mecklenburg can use the data in the reports to place local trends in context with state and national data, as well as benchmark local progress relative to other Metro Areas. This week’s blog post provides subject-specific overviews of both reports, as well as analysis, focusing on what the data can mean for Charlotte-Mecklenburg.
According to the new NLIHC report, there is an absolute shortage of 3.6M affordable and available rental homes for households with an income at or below 30% of Area Median Income (AMI). These are typically identified as “extremely low-income” households. Only renter households in this income bracket face an absolute lack of affordable housing. This shortage equates to only 37 affordable and available homes for every 100 extremely low-income renter households. For reference, this number was 36 in 2019.
This lack of inventory is not an accounting of people experiencing homelessness. According to the recently released HUD report, the number of people in the U.S. who are experiencing literal homelessness on a single night in January 2020 (which means in an emergency shelter, transitional housing, or other safe haven) is 580,466. This reflects a 2.2% (12,751 person) increase since 2019. This shortage also does not include the number of people experiencing homelessness in other forms not captured within the report, such as those who are doubled up or in hotels/motels. Thus, the total national absolute shortage of affordable and available rental homes for extremely low-income renter households is, at minimum, 4.18M.
Housing instability and homelessness also disproportionately impact households of color. According to the NLIHC report, households of color were more likely to be behind on rent as of January 2021. Among those renter households earning less than $25,000 per year, 36% of renters identifying as Black/African American and 29% of Latino renter households were behind, as compared with 12% of white renter households. In addition, extremely low-income households of color were more likely to be significantly impacted by the economic effects of COVID-19. And according to the HUD report, people of color continue to be overrepresented among people experiencing homelessness. In fact, almost 4 of every 10 people experiencing homelessness identified as Black/African American; and 23% of people experiencing homelessness identified as Hispanic or Latino.
In contrast to the dire need at the lowest end of the income spectrum, the NLIHC report shows that households with higher income (especially those who are at or above 50% AMI) actually have a surplus of available housing. Using census data, the NLIHC report provides the number of households by income category, compared with the number of cumulative units affordable to those households by the same income category. For example, compared with only 7.4M rental units available to 10.8M households with income at or below 30% AMI, there are 46.2M rental units affordable to 12.5M households with income higher than 100% AMI.
When combining both factors of affordability and availability, there are even fewer units for households with the lowest income. This is because households with higher incomes can and do “rent down,” which puts more pressure on extremely low-income households who are competing for an already limited number of units. Whereas there are only 37 affordable and available units for households with income less than 30% AMI, there are 60 affordable and available units for households with income at or below 50% AMI; 94 affordable and available units for households with income at or below 80% AMI; and 102 affordable and available units for households with income at or below 100% AMI. As these numbers reflect inventory and population counts across the entire United States, it is important to recognize that a national surplus does not necessarily correspond to a local surplus.
STATE & NATIONAL CONTEXT
According to the NLIHC report, there are no states that have an adequate supply of affordable housing for those households with extremely low income levels (less than 30% AMI). The range in affordable housing shortages across states is vast, with a need for (as few as) 7,400 units in Wyoming and (as many as) 962,000 in California. North Carolina has a shortage of 190,910 units for extremely low-income households. This equates to 45 rental homes that are affordable and available per 100 extremely low income renter households; this is above the national level of 37. States with rates like that of North Carolina include Minnesota, Nebraska, Missouri, South Carolina, Georgia, Connecticut, and Ohio. States with the lowest number of affordable and available housing units per lower income household include Oregon, California, Nevada, Arizona, Colorado, Texas, Florida, and Delaware.
According to the NLIHC report, a significant factor remains the lack of subsidized, affordable homes for households with incomes at or below 30% AMI. In fact, the report found that when a metro area has less HUD-assisted housing (which includes public housing, Housing Choice Vouchers, and project-based rental assistance) as a share of the total rental stock, they also have a greater share of extremely low-income renter households who are severely cost-burdened (which means they are paying more than 50% of their income to housing-related expenses). And they found this to be true regardless of the rental vacancy rate, share of rental housing in multifamily buildings, and even the age of housing stock.
This finding is also true of homelessness. According to an analysis completed by the Harvard Joint Center for Housing Studies, the states with the highest share of households facing cost burden also had the highest rates of homelessness. The analysis found that the three states with the highest cost burden in 2019, California (39.5%), Hawaii (38.7%) and New York (36.4%), were also the states with the highest rates of homelessness in January 2020. North Carolina has a cost burden rate of 27.7%, and a rate of 8.8 people experiencing homelessness per 10,000 people.
The new HUD report indicates that were 9,280 people experiencing homelessness in North Carolina on a single night in January 2020. This total includes 6,756 individuals and 2,524 people in families with children. Of the 9,280 total people experiencing homelessness are 485 unaccompanied youth; 798 veterans; and 1,174 individuals experiencing chronic homelessness. By comparison, the 2020 Charlotte-Mecklenburg Point-in-Time Count found 1,604 total people experiencing homelessness. This equates to a homelessness rate of 14.2, locally, as compared to 8.8 at the state level.
States with similar homeless rates to North Carolina include Arkansas, Illinois, Michigan, Iowa, Kansas, Ohio, Indiana, Kentucky, South Carolina, Georgia, and Connecticut. States with the highest rates include California, Hawaii, Oregon, New York, Washington, and Alaska. Between 2019 and 2020, North Carolina actually experienced the largest decrease in veteran homelessness (109 veterans, 12% decrease) among all 50 states.
BENCHMARKING LOCAL PROGRESS
According to NLIHC report, the Charlotte Metropolitan Statistical Area (MSA), which is defined as Charlotte-Concord-Gastonia (NC-SC), has 38 rental homes affordable and available per 100 extremely low income renter households, which is slightly better than national rate of 37. This represents a deficit of 41,923 units across the Charlotte Metro Area for extremely low-income households. Last year, that deficit was 40,545. When narrowing the boundaries to Mecklenburg County, the current gap is approximately 23,000 units for extremely low-income households.
Metro areas with affordable housing shortage rates similar to the Charlotte MSA include Providence, RI; Boston, MA; Pittsburgh, PA; Cleveland, OH; Louisville, KY; Cincinnati, OH; St. Louis, MO; Buffalo, NY; and Kansas City, MO-KS. In comparison, the metro areas with the lowest number of available and affordable units are Las Vegas, NV; Houston, TX; Los Angeles, CA; Phoenix, AZ; Portland, OR; Dallas, TX; Sacramento, CA; Miami, FL; and San Diego, CA.
The new HUD report provides a census at the Continuum of Care (or CoC) level (which is smaller than the Charlotte Metro Area). The Charlotte-Mecklenburg CoC is considered one of the “Major City CoCs” which are CoCs that contain one of the 50 largest cities in the United States. The Major City CoCs with the largest homeless populations in 2020 were the New York City CoC; Los Angeles City and County CoC; Seattle/King County, WA CoC; San Jose/Santa Clara City and County, CA CoC; and Oakland, Berkeley/Alameda County, CA.
In addition to using the newly released reports to better understand the problems of housing instability and homelessness, communities can also look to these documents for solutions.
The NLIHC report makes clear the need for deep, long-term investment. Also required are solutions that can sustain the efforts to change the trends that predated COVID-19 and have only worsened as a result. For example, the NLICH report calls for ongoing rental assistance; preservation and increased supply of affordable homes through the national Housing Trust Fund (an annual block grant to states for creation, preservation or rehabilitation of rental housing for lowest-income renters); increased investment in public housing; creation of a permanent National Housing Stabilization Fund to make emergency rental assistance available when needed; critical renter protections such as the right to counsel for evictions and expungement of eviction records; and zoning reforms.
On Monday, the Biden Administration announced the extension of the U.S. Centers for Disease Control and Prevention (CDC) enacted eviction moratorium to June 30, 2021. The extension is accompanied by a new White House Fact Sheet that provides information to increase awareness around the moratorium protections.
In addition, the Biden Administration announced yesterday, as part of the American Jobs Plan, a $213B proposal to “produce, preserve, and retrofit more than 2 million homes and commercial buildings to address the affordable housing crisis” with the goal of creating jobs “building, rehabilitating, and retrofitting affordable, accessible, energy efficient, and resilient housing […].” To accomplish this, the plan will use targeted tax credits, formula funding, grants, and project-based rental assistance; call for elimination of exclusionary zoning and harmful land use policies; and invest $40B in the public housing infrastructure system.
In addition to COVID-19 housing-related relief packages, this historic level of federal investment can help support the local work to end and prevent homelessness. Communities like Charlotte-Mecklenburg can seize this opportunity to effectively attend to the full needs of the housing continuum; and ensure that federal efforts will ultimately make a difference here, at home.
Courtney LaCaria coordinates posts on the Building Bridges Blog. Courtney is the Housing & Homelessness Research Coordinator for Mecklenburg County Community Support Services. Courtney’s job is to connect data on housing instability, homelessness and affordable housing with stakeholders in the community so that they can use it to drive policy-making, funding allocation and programmatic change.