2015 Affordable Housing Advisory Council Annual Report
Report From The Chair
The difference between what lower-income and upper-income families and individuals spend on housing makes the concept of a wealth gap anything but abstract. With a population of renters that has grown significantly since the Great Recession, the growing disparity in the wealth of richer and poorer American households is being driven to a great degree by ever higher housing costs.
In 1960, less than a quarter of all renting households in the United States spent 30 percent or more of their monthly income on rent. Today, upper-income renters spend only about 15 percent of their income on rent, while lower-income households are devoting nearly half their income to housing, reports The Pew Charitable Trust.
And the lower down the income ladder you go, the worse it gets. As the National Housing Conference’s Housing Landscape 2016 reports, one out of five low- to moderate-income households is spending over half their income on housing, while nearly four out of five extremely low-income households are severely burdened by rising housing costs. According to the National Low Income Housing Coalition’s Affordable Housing Gap Analysis, the absolute shortage of affordable housing units for the poorest is unprecedented throughout the country, and especially in our district: Nevada had the least adequate supply, with only 17 affordable and available units for every 100 extremely low-income households, with Arizona and California not far behind.
On a daily basis, severely cost-burdened families and individuals are forced to make any number of hard choices just to keep a roof over their heads. Gas for the car, or groceries? Healthy food, or cheap fast food? Utility bills, or medicine? A second job, or more time with family? And when any bit of bad luck might just be enough to tip a family over into homelessness – to join the more than half a million people in this country, 125,000 of them children, with no place at all to call home – how can these cost-burdened families even dream of saving for college costs or retirement, or to buy a first home?
Homeownership remains one of the greatest wealth-building opportunities for working families. But that aspiration remains out of reach for a large and growing share of the American population: those making too little money and spending too much of it on rent to save for a downpayment in an environment of ever-increasing home prices and restrictive loan underwriting requirements.
Providing opportunity is essential to American ideals, and a stable, affordable home creates a foundation for success. While the nation’s housing finance system remains in limbo, with any meaningful reform or new policies at least a presidential election away, the Affordable Housing Advisory Council recognizes the importance of continuing to bring the resources of the Bank and its members together with the expertise of local affordable housing developers and community nonprofits to find innovative ways of helping people make a better life for themselves and their families.