Chapter 2 -- Continued

The number of very-low-income renters in the West continued to increase between 1993 and 1995, while dropping in other regions. Once again, the West had the highest percentage of very-low-income renters with acute housing needs, 42 percent, compared with 32 percent in the South, 33 percent in the Midwest, and 39 percent in the Northeast (see exhibit 25). The result is that the number of Western households with worst case needs reached a record 1.56 million in 1995.

At the same time, renters living in the West who have very low incomes are considerably less likely to receive Federal housing assistance than households in other parts of the country. Only 18 percent of very-low-income renter households in the West receive housing assistance, compared with an average of 29 percent for very-low-income renters in the other three regions of the country.

Virtually all public housing units and much of the project-based Section 8 stock were developed before the large population shift to the West. The recent growth in the number of tenant-based certificates and vouchers has not been large enough to balance these disparities in Federal housing assistance across the Nation.¹⁴

• The largest increases in worst case needs occurred in the Northeast and the West, where the mismatch between the wages of entry-level workers and the rents of even the most affordable housing continues to widen.

Because affordability is the overwhelming cause of worst case housing needs, those areas of the country with high housing costs are the areas where worst case needs are growing the most rapidly. Increasing income inequality and the loss of rental units that the lowest income families can afford are particularly pronounced in these areas, as overall economic growth brings upward pressures on rent.¹⁵ Particularly in the Northeast and the West, working full-time at minimum wage or living on a modest pension does not bring in enough income to pay the rent.

Between 1991 and 1995, the number of unassisted very-low-income renters with worst case housing needs increased by 160,000 in the Northeast and 226,000 in the West (see exhibit 14).

• Mismatches between extremely-low-income renters and rental units affordable to them are most severe in the West.

The mismatch between available extremely-low-rent units and extremely-low-income renters is large and getting larger in all four census regions. Shortages are worst in the West, however, where in 1995 for every 100 extremely-low-income renters there were only 31 units that were either already occupied by extremely-low-income renters or vacant and for rent, compared with the nationwide figure of 44 units per 100 renters (see exhibit 26).

14. Since 1974, all housing assistance -- newly produced units of public housing and project-based Section 8 as well as funding for new units of tenant-based assistance -- has been allocated to different parts of the country on the basis of a formula. Although the formula has changed somewhat over time, it has failed to reflect worst case needs in any direct way and has never taken into account the effect of historical patterns of housing assistance.

15. Affordable Rental Housing: When to Build, When to Preserve, When to Subsidize? A Study of Housing Market Dynamics in 41 Metropolitan Areas, HUD, Office of Policy Development and Research, forthcoming May 1998.