Chapter 2 -- Continued

HUD's 1996 report to Congress on worst case housing needs demonstrated a serious mismatch between numbers of extremely-low-income renters and numbers of units affordable to them as of 1993. This mismatch worsened markedly in just 2 years.

• There were sharp losses in rental units for very-low-income renters.

Between 1993 and 1995, losses of private market rental units affordable to very-low-income renters -- that is, units on which a family with income at 50 percent of median would spend 30 percent of income or less -- accelerated greatly. Between 1993 and 1995, the number of units affordable to very-low-income renters dropped by almost 900,000, from just under 10.4 million to 9.5 million units (see exhibit 8).

This drop in very-low-rent units was almost four times greater than the decline in very-low-income renters. The number of very-low-income renters dropped slightly, by 229,000, between 1993 and 1995.

• The gap between the lowest income renters and units affordable to them is large and growing.

The largest losses of private rental stock, in percentage terms, were for units with rents affordable to extremely-low-income renters, those on which a family with income at 30 percent of median would spend 30 percent of income or less. The number of extremely-low-rent private market units dropped from 1.8 million in 1993 to 1.5 million in 1995, a 16-percent loss in just 2 years.

The gap between the number of extremely-low-income renters and the number of extremely-low-rent housing units continued to get worse. By 1995, for every 100 extremely-low-income renters there were only 77 units with rents that would have been affordable had those units been available to them. By comparison, there were 111 affordable units for every 100 renters with incomes below 50 percent of area median income.

Not all these extremely-low-rent units were rented by the lowest income renters. Many of these units were occupied by households with incomes greater than 30 percent of median. When only those units either vacant and for rent or already occupied by extremely-low-income renters are considered available, there were only 44 units per 100 households in 1995. This ratio has dropped steadily during the 1990s (see exhibit 9).

Another indication that the private housing market does not supply rental units affordable to the lowest income families is that more than three quarters of the extremely-low-rent units occupied by households at any income level were "non-market" units. These include public and assisted housing, other housing with publicly subsidized rents, and units for which the occupant did not pay a cash rent.

• In a historic reversal of Federal housing policy, Congress has stopped providing funding to expand rental assistance for households with worst case needs.

The Federal Government began its commitment to providing low-income renters with decent quality, affordable housing in response to the Great Depression in the 1930s. Since World War II, there has been an uninterrupted growth in the number of households who have been provided with Federal rental assistance through a variety of Federal construction, rehabilitation, and rental assistance programs.

The growth in the numbers of households receiving rental assistance peaked in the late 1970s, when more than 200,000 additional households were being added to the housing assistance rolls each year. From 1978 through 1982, an average of 224,000 additional households were provided Federal rental assistance each year. The average number of new households getting assistance dropped to approximately 146,000 during the 1980s and early 1990s.

This trend ended abruptly in 1996, when for the first time, the number of renters receiving Federal housing assistance actually dropped (see exhibit 7). Since 1995, Congress has denied Administration requests and provided no funding for new rental assistance to serve families with worst case needs.