Yes there is, according to Harvard University's Joint Center for Housing Studies (JCHS)’s recently released report entitled "America's Rental Housing: Meeting Challenges, Building on Opportunities"—and it is growing. The report provides an up-to-date picture of the rental market, but also provides some historical context. For example:
- The rental housing market is tightening, and the nation's current supply of affordable housing is insufficient: 18 million households are competing for 11.5 million units of affordable housing, and the supply/demand imbalance in the affordable inventory has worsened since the foreclosure crisis developed.
- Instead of growing, rental vacancy rates are falling across many markets and even modestly on a national basis. At one point, the multifamily industry was regularly producing 400,000 to 600,000 units annually, and some of that production added to the unsubsidized, but still affordable housing inventory. By contrast, production is now as low as 124,000 rental unit completions, with much of that production spurred by Low-Income Housing Tax Credit (LIHTC) investment.
- Rental supply growth is not necessarily happening where it is needed most. You can't move vacant rental stock from southeast Florida to the oil boom towns of North Dakota.
- Existing supply is shrinking. The report says, "Since the mid-1990s, more than 700,000 rental units with federal subsidies tied to them were lost from the subsidized housing stock (either through demolition, or owner decision to abandon subsidies and turn the units into market-rate rentals). Meanwhile, nearly 12 percent of low-cost rentals existing in 1999 were demolished or otherwise permanently lost from the housing stock by 2009."
While this supply/demand imbalance in the affordable rental housing market is not a new problem, the study illustrates that it has gotten considerably worse in recent years and shows no sign of getting any better in the near future, both in terms of the anemic supply as well as increased demand from struggling low-income families. Incomes among low-income households have been flat at best in recent years and in real terms are falling. At the same time, rental housing costs are increasing steadily, leaving renters with less disposable income to spend on food, education and health care.
The overall result? As reported in the JCHS study, "one in four renters, or 10.1 million households, spends more than half their income on rent and utilities. Another quarter of renters, 26.2 percent, spends 30 to 50 percent of their income on rent and utilities." The JCHS study’s authors expect the problem to worsen as the economy is likely to "push up rents faster than renter incomes recover."
JCHS characterizes the LIHTC program as standing "nearly alone in replenishing the affordable stock, supporting both new construction and substantial rehabilitation of existing properties including older assisted developments." Without the LIHTC, we would be in an even deeper hole than we are. Furthermore, the report says, "… the Low-Income Housing Tax Credit program has sound financial underpinnings and a track record of success in delivering rental housing assistance." The LIHTC program faces possible elimination as Congress proceeds with its deficit-reduction plans.
How will you help us make Congress aware of the LIHTC’s track record of success?