Federal Rental Assistance and Affordability

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November 18, 2024

Federal Rental Assistance and Affordability

Housing is generally considered affordable if it costs a household no more than 30% of their income; households who pay more are considered cost-burdened. About half of U.S. renters are cost-burdened and the lowest-income renters have the highest cost burdens. To address high cost-burdens for lower-income families, the federal government funds several rental assistance programs that allow recipients to pay affordable rents; federal funding for these programs is insufficient to serve all eligible households.

Federal Rental Assistance and Affordability

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Sources and Notes

Renter Cost Burden

Source: Data from Tables A-1A and A-3 of HUD, Worst Case Housing Needs: 2023 Report to Congress, May 2023, https://www.huduser.gov/portal//portal/sites/default/files/ pdf/Worst-Case-Housing-Needs-2023.pdf. HUD’s analysis in this report is based on special tabulations of 2021 Census American Housing Survey data.

Notes: Renters are presented as either “assisted” or “unassisted” and rent burden status is only provided for households that are unassisted, consistent with HUD WCHN methodology. However, assisted households may be cost-burdened; for example, households with Housing Choice Vouchers are only required to pay 30% of their incomes towards their rent; however, they may choose to pay up to 40% in the first year, or more in subsequent years, in order to acquire or retain a higher-cost unit.

“Assisted” renters presented here self-report their receipt of housing assistance. It is presumed most of these renters participate in a federal rental assistance program; however, more households report receipt of housing assistance than there are federal rental assistance program recipients. There may be various causes of this discrepancy, including renters mistakenly reporting housing assistance receipt and renters receiving state- or locally funded housing assistance. HUD and the Census Bureau have developed an oversample of HUD-assisted renters to better inform their understanding of HUD-assisted renters. For more about those efforts, see HUD, U.S. Census Bureau, U.S. Department of Commerce, HUD-Assisted Renter Oversample: 2015-2024, September 2024, https://www.census.gov/content/dam/Census/ programs-surveys/ahs/tech-documentation/2015-later/ HUD- Assisted%20Renter%20Oversample%202015%20and%20 Beyond.pdf.

Worst Case Housing Needs

Source: Data from HUD, Worst Case Housing Needs Report, 2023, Exhibit 1-1. For the historical time series, see https://www.huduser.gov/portal/AFWCN.html.

Notes: “Severely inadequate housing” is defined as housing that has one or more serious physical problems related to heating, plumbing, and electrical systems or maintenance (explained in Appendix E of the 2023 WCHN report). While both severe cost burden and severely inadequate housing are considered WCHN, severely inadequate housing alone caused only 2.8% of WCHN in 2021. As in past years, severe rent burden was the primary driver of WCHN.

Federal Rental Assistance

Sources: Household data from HUD, “2023 Picture of Subsidized Households” dataset, available at https://www.huduser.gov/portal/datasets/assthsg.html; and U.S. Department of Agriculture (USDA), Fiscal Year 2023 Multifamily Housing Annual Occupancy Report, available at https://ruralhome.org/wp-content/uploads/2024/03/

OccupancyMFH2023.pdf. Figures represent occupied units/subsidies in use.

Federal spending (outlays) data from the Office of Management and Budget, “Public Budget Database,” FY2025, available at https://www.whitehouse.gov/wp- content/uploads/2024/03/outlays_fy2025.xlsx. Accounts included: Tenant-Based Rental Assistance, Project-Based Rental Assistance, Housing Certificate Fund, Other Assisted Housing, Public Housing Fund, Public Housing Operating Fund, Public Housing Capital Fund, Revitalization of Severely Distressed Public Housing, Choice Neighborhoods Initiative, Housing for the Elderly, Housing for Persons with Disabilities, and Rental Assistance Program (USDA).

Notes: These data focus on federal rental assistance, a category of federal housing assistance that is categorized by ongoing (not temporary) housing assistance that requires recipients to pay no more than 30% of their income toward their housing costs. The federal government also funds various grant and tax credit programs that can be used to subsidize the development of rental housing with below- market rents (e.g., Low Income Housing Tax Credits [LIHTC], HOME Investment Partnerships block grants, Continuum of Care grants). Those programs—which are not considered federal rental assistance programs—are not included here, but may be used in conjunction with federal rental assistance programs. For example, a tenant with a Housing Choice Voucher may choose to live in a housing unit financed with LIHTCs.

Assisted Households

Source: Data from HUD, “2023 Picture of Subsidized Households” dataset, available at https://www.huduser.gov/ portal/datasets/assthsg.html.

Notes: A household that is headed by an elderly person with disabilities is shown as an elderly household.

The estimate that one in four eligible households receives federal rental assistance comes from dividing the number of households receiving federal rental assistance by the number of very low-income renters. In 2021, according to HUD’s “2021 Picture of Subsidized Households” data and USDA’s Multifamily Housing Annual Occupancy Report, there were 4.8 million assisted renters.* This compares to 19.34 million very low-income renters in 2021, according to HUD’s Worst Case Housing Needs Report, 2023. This is a rough measure, as some rental assistance programs serve households with higher income (up to 80% of local area median income) and some households with very low incomes may have other characteristics that would disqualify them from receiving federal housing assistance (e.g., ineligible immigration status, certain criminal backgrounds, significant assets).

*While 2023 data are presented elsewhere in this report, 2021 data are used in this calculation for comparability.

Maggie McCarty, Specialist in Housing Policy

IF12824

Federal Rental Assistance and Affordability

https://crsreports.congress.gov | IF12824 · VERSION 1 · NEW

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