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

This appendix discusses the procedures and definitions used with microdata from the 1997 AHS to estimate the number of households in different income categories that have worst case needs or other housing problems and to estimate the number of rental units in affordability categories defined as percentages of HAMFI.

• All estimates in this report base income category and rent burdens on reported household income for the past 12 months for all households.

• Because HUD's official income limits have been based on 1990 census data since 1993, limits based on 1990 census data, updated for inflation by the CPI, were used for this report.

• Area income limits. To categorize households in relation to "local" income limits as accurately as possible within the limitations of the geography shown on the AHS public use files, household income was compared with area income limits for all households. Very-low- and low-income cutoffs for a household of four-that is, 50 or 80 percent of HAMFI, respectively-were defined for each unit of geography identified on the AHS national microdata tapes. Official income limits were used directly for each of the 141 MSAs identified on the AHS tapes. For housing units outside these MSAs, the AHS geography identifies only four regions, metropolitan status, and six climate zones. Average income limits were estimated for each of these 48 locations weighting by 1990 population.

• Categorizing households by income. For all households, income status is determined by comparing household income with the very-low- and low-income cutoffs, with appropriate adjustments for household size. Households reporting negative income were categorized as middle-income if their monthly housing costs were above the Fair Market Rent (FMR) and they lived in adequate housing, since many households in this situation appear to be reporting temporary accounting losses.

• Receiving housing assistance. As discussed in Appendix C, to more accurately identify households participating in housing assistance programs, the order and content of the AHS questions about housing assistance were changed in 1997. The 1997 questions used to identify assisted households are: "As part of your rental agreement, do you need to answer questions about your income whenever your lease is up for renewal? (If so,) to whom do you report your income? Do you pay a lower rent because the government is paying part of the cost of the unit? Is the building owned by a public housing authority?"

From these questions, it is no longer possible to distinguish between Federal and State or local programs. Accordingly, the counts of assisted households in this report are not comparable to data from earlier reports. To increase comparability between earlier data and the 1997 approach, with data from 1991, 1993, and 1995 in this report, households were counted as receiving housing assistance if they answered "yes" to the question "Does the State or local government pay some of the cost of the unit?" or to one of the three AHS questions used in previous worst case reports: "Is the building owned by a public housing authority? Does the Federal Government pay some of the cost of the unit? Do the people living here have to report the household's income to someone every year so they can set the rent?"

• Severe or moderate physical problems. The definitions are those used since 1984 in AHS and defined in Appendix A of published AHS volumes. As discussed in Appendix C of this report, however, some of the questions underlying the definitions were changed in 1997, thus making 1997 results less comparable to earlier results. A unit is considered severely inadequate if it has any one of the following five problems:

  —Plumbing. Lacking piped hot water or a flush toilet or lacking both bathtub and shower, all for the exclusive use of the unit.

  —Heating. Having been uncomfortably cold last winter for 24 hours or more or three times for at least 6 hours each due to broken down heating equipment.

  —Upkeep. Having any five of the following six maintenance problems: leaks from outdoors, leaks from indoors, holes in the floor, holes or open cracks in the walls or ceilings, more than a square foot of peeling paint or plaster, or rats in the last 90 days.

  —Hallways. Having all of the following four problems in public areas: no working light fixtures, loose or missing steps, loose or missing railings, and no elevator.

  —Electrical. Having no electricity or having all of the following three electrical problems: exposed wiring, a room with no working wall outlet, and three blown fuses or tripped circuit breakers in the last 90 days.

A unit is defined as moderately inadequate if it has any of the following five problems, but none of the severe problems:

—Plumbing. Having all toilets break down simultaneously at least three times in the last 3 months for at least 6 hours each time.

—Heating. Having unvented gas, oil, or kerosene heaters as the main source of heat (since these heaters give off unsafe fumes).

—Upkeep. Having any three of the six upkeep problems mentioned under severe problems.

—Hallways. Having any three of the four hallway problems mentioned under "severely inadequate."

—Kitchen. Lacking a sink, range, or refrigerator for the exclusive use of the unit.

• Weighting of AHS estimates, 1990 based. Because each housing unit in the AHS sample represents many other units, the sample data are adjusted so that each year's total matches independent estimates of the total housing stock. For 1997, these independent estimates were based on the 1990 Census of Housing (1990 weights).