Building the Report
This report uses data from the 1997 AHS and 1999 HUD administrative data. As Exhibit 1 details, improvements in the 1997 AHS questions used to identify assisted households necessitate changing the definition of worst case needs used in this report from that always used previously. In earlier reports, the definition of worst case needs did not categorize households reporting State or local rental assistance as already receiving (Federal) assistance and therefore, by definition, not part of the unassisted population that would be counted as having worst case needs if they had severe housing problems. Because the 1997 AHS questions no longer distinguish whether housing assistance is provided by State or local government rather than a Federal program, in this report all households reporting assistance are excluded from the count of those with worst case needs.
To evaluate changes between earlier years and 1997 as well as is possible with the new worst case needs definition, revised—and lower—estimates of worst case needs derived from newly including families reporting State and local assistance as assisted families are reported for the years 1991, 1993, and 1995 in this report. Although these revised estimates are the best available from earlier surveys, as Exhibit 1 and Appendix C discuss, a variety of considerations imply that 1997 data are not directly comparable to data for earlier years, particularly for concepts, like worst case needs, that rely heavily on definitions of rental assistance.
Although the definition of worst case needs is necessarily changed, the practice of earlier reports is continued in the following ways:
- Detailed income categories are used to examine the housing needs of households.
Like the previous two reports, this report distinguishes among extremely-low-income households (those with incomes at or below 30 percent of area median family income, as adjusted by HUD), other very-low-income households (those with incomes between 31 and 50 percent of area median income), and other low-income households (those with incomes between 51 and 80 percent of area median income). As detailed in Appendix B, HUD's official income limits are adjusted for household size and for areas with extremely high or low housing costs relative to area income.
The extremely-low-income category, which has also been highlighted in the previous two reports, is particularly important for analyzing the policy implications of the data and findings contained in this report. On October 21, 1998, President Clinton signed into law the Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276). That law provided that at least 40 percent of all public housing and project-based Section 8 units that become available for rent in any given year and at least 75 percent of all vouchers that become available in any given year (either through new appropriations or through "turnover" of existing vouchers) must be provided to families with income at or below 30 percent of area median income. This important legislative achievement recognized the particular effectiveness of Section 8 rental vouchers in meeting the housing affordability needs of extremely-low-income families without concentrating poor families in particular projects and neighborhoods. It also recognized the need to ensure that in the absence of the Federal preferences that were repealed by QHWRA, a substantial share of the units in public and project-based assisted housing programs must be targeted to the extremely-low-income families most likely to have worst case needs. 5
This report also provides information on the housing problems of higher income families, including those in the income group between 51 and 80 percent of median that are now also eligible for rental assistance programs. Although some households with incomes above 50 percent of median income have the severe "priority" problems that qualified households for Federal preference in admission to rental assistance programs before QHWRA, these higher-income households have never been included in the definition of worst case needs. This approach was adopted because in the 1980s all tenant-based vouchers had to go to very-low-income renters, and it has been used in all reports on worst case housing needs.
- The most recent information from HUD administrative records is used to show how rental assistance programs serve different income and demographic groups.
The 1998 report used data from the Multifamily Tenant Characteristics System (MTCS) and the Tenant Rental Assistance Certification System (TRACS) as of February 1997. This report uses TRACS and MTCS data from April and August 1999, respectively.
- 1997 AHS national data are used to update the evidence of mismatches between very-low-income renters, or extremely-low-income renters, and the availability of units affordable to them.
Earlier reports tracked numbers of renters with incomes below 30 percent or 50 percent of area median compared to numbers of units affordable to these renters, assuming that units are "affordable" if only 30 percent of income is spent on rent and utilities. The 1996 and 1998 reports also documented changes in the number of private-market units affordable to renters in these income groups. Because the changes in questions about housing assistance mean that 1997 counts of unassisted units are not comparable to earlier data, this report focuses on changes in the total number of affordable units, including those with Federal, State, or local assistance, rather than examining only private-market units.
5 For a history of the Federal preferences, see Exhibit 12, "History of the Federal Preference System," on page 17 of the April 1998 worst case report, Rental Housing Assistance—The Crisis Continues.
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