«Moving to opportunity voluMe 14, nuMber 2 • 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research ...»
Rental assistance applicants were far less likely to be severely rent burdened than were very low-income renters identified as having WCN. This finding is not surprising, given that severe rent burden is one of two measures used to identify WCN and that the other measure—severely substandard housing—has become increasingly rare. It is more instructive to compare incidence of severe rent burden among rental assistance applicants with that of all very low-income renters within the same metropolitan area.3 This comparison of rental assistance applicants with other very low-income households does not include applicants who were homeless or living in an institutional setting, because these groups are not captured in the AHS. This comparison does, however, include very low-income renters currently receiving rental assistance, because this group is included in the AHS and, as shown in exhibit 4, many assisted households apply for and receive assistance from other housing programs.
The AHS comparison group also includes households with people who have disabilities or who are elderly. Filtering these households out of the analysis might have made for a more direct comparison, but it would have restricted the sample size such that the analysis would not have been feasible. The comparison is based on first calculating the proportion of severely rent-burdened respondents within each PHA (for the survey of applicants) and metropolitan area (for the AHS comparison group), then calculating a weighted average based on the number of respondents within each site.4 Because the waitlisted respondents are not a representative sample, this analysis compares only the incidences of severe rent burden among the surveyed waitlisted applicants with that among very low-income AHS respondents within the same metropolitan areas. Thus, the results are only suggestive of differences between the total populations of rental assistance applicants and all very low-income renters.
On average, 36 percent of rental assistance applicants were severely rent burdened compared with 56 percent of very low-income renters surveyed by the AHS in the same metropolitan areas. The z-test showed that the difference in means was significant at the.01 level (exhibit 9). Thus, rental assistance applicants were significantly less likely to be severely rent burdened than were very lowincome renters in the same metropolitan areas.
The survey asked new admits to report their monthly housing costs both before and after receiving rental assistance. The comparison shows that, on average, new admits experienced a $112 reduction in their monthly housing costs. New admits who had been living independently without a subsidy reduced their housing costs by $390 per month after receiving assistance. Households already receiving a housing subsidy reduced their housing costs by an average of $125. The average monthly housing costs of applicants living with family or friends increased by $93 after receiving assistance (exhibit 10).
The AHS public data set includes only a household-level metropolitan statistical area code for metropolitan areas with populations of 100,000 or more. Thus, this analysis applies only to the 14 sampled PHAs in 9 metropolitan areas of at least 100,000 people.
Appendix A presents the formulas for the analysis.
Homelessness and Housing Instability To assess housing instability, the survey asked rental assistance applicants if, at any time in the past 12 months, they did not have a place of their own to stay.5 In addition to the 7 percent of applicants who were literally homeless at the time they were interviewed or immediately before receiving assistance, 23 percent of housing applicants reported that they had been without a place of their own to live at some point during the past 12 months (exhibit 11). Among applicants without a place of their own to live, 64 percent reported that this problem persisted for more than 2 months. The survey asked applicants who were without a place of their own to live if they spent time living either in a shelter or on the streets, the HUD definition of literally homeless. Of these applicants, 15 percent reported living in a shelter at some point when they did not have a place of their own and 17 percent reported living on the streets.
Applicants living with friends appeared to be at greater risk of homelessness than applicants living independently or with family. Applicants living with friends were the most likely (54 percent) to Waitlisted applicants were asked if, at any time in the past 12 months, they did not have a place of their own to stay, and new admits were asked about the 12-month period immediately before they began receiving assistance.
report being without a place of their own to live in the past 12 months, the most likely (78 percent) to report that this condition lasted for more than 2 months, and the most likely (26 percent) to report living on the streets during this period.
Substandard Housing The survey of housing applicants asked waitlisted households about housing quality problems in their current residence and new admits about housing quality problems in their last residence before receiving housing assistance. The housing quality questions asked of applicants were taken from a study of housing quality problems in the Gulf States after Hurricane Katrina.7 Therefore, the results cannot be compared directly with the AHS questions used to identify renter households in severely substandard housing.
New admits were asked about their tenure at their last address before receiving assistance.
Appendix B compares each housing quality question asked of applicants with the most similar housing quality question included in the AHS.
More than one-half (51 percent) of rental assistance applicants reported at least one specific problem with the quality of their housing before receiving assistance, and one-third reported two or more problems (exhibit 13). Applicants living independently were more likely to report housing quality problems than were applicants living with family or friends.
Overcrowding The survey of housing applicants asked about the number of residents living in the applicant’s housing unit and the number of rooms in the unit, excluding bathrooms and hallways. Exhibit 15 examines the incidence of overcrowding among rental assistance applicants. This analysis considers a housing unit overcrowded if the number of people in the housing unit exceeds the number of rooms. The AHS uses the same measure to identify overcrowded units. The WCN report classifies overcrowding as a “moderate” housing problem rather than a WCN.
Overall, 18 percent of rental assistance applicants lived in overcrowded housing units. Surprisingly, applicants living independently were more likely than applicants living with family or friends to live in overcrowded units. Applicants in subsidized units were the least likely to live in overcrowded housing. Applicants with young children, defined as children less than 6 years old, were three times as likely to be in overcrowded households as other applicants (25 versus 8 percent). Because young children can share a bedroom with their parents or siblings, these units may not feel as crowded as similarly sized units with only adults and older children. Immigrant cultures are often perceived to have more permissive attitudes towards overcrowding and doubling up (Koebel and Renneckar, 2003). This is consistent with our results, which found that Hispanic and Asian applicants were more likely to live in overcrowded conditions.
Exhibit 16 compares the incidence of overcrowding among rental assistance applicants with that of very low-income renters in the same metropolitan area. As in exhibit 9, this comparison is based
on first calculating the proportion of overcrowded respondents within each PHA (for the survey of applicants) and metropolitan area (for the AHS comparison group), then calculating a weighted average based on the number of respondents within each site.8 Rental assistance applicants were more than twice as likely as very low-income renters to live in overcrowded housing (13 versus 6 percent). These differences were statistically significant at the.01 level. Rental assistance applicants were also more likely than very low-income renters to have young children (51 versus 19 percent). Excluding households with young children from both population groups, applicants were still significantly more likely than very low-income renters to live in overcrowded housing (p-value = 0.01).
Household Formation Low-income families may choose to live with people with whom they would rather not live if they could afford to live independently. The inability to form a household of one’s own is not considered a WCN, but it could be a major reason why households choose to apply for rental assistance (Shroder, 2002). Of applicants on waiting lists for rental assistance, 63 percent reported that they currently lived with one or more other adults. More than two-thirds of these applicants (68 percent) said that they did not plan on living with all of the other adults in their household after receiving assistance (exhibit 17). The preponderance of single female-headed households in assisted housing is sometimes viewed as a negative effect of the rent subsidy structure, because Appendix A presents the formulas for the analysis. As noted, regarding exhibit 9, because the waitlisted respondents are not a representative sample, this analysis compares only the incidence of overcrowding among the surveyed waitlist applicants with that among very low-income AHS respondents within the same metropolitan areas. Thus, the results are only suggestive of differences between the populations of rental assistance applicants and all very low-income renters.
Source: Buron et al. (2010) households with multiple wage earners pay higher rents. Most applicants, however, reported that the reason other adults would not live with them after receiving assistance was because they preferred to live independently.
Discussion Although these results are from a relatively small and not nationally representative sample, they have important implications for our understanding of housing needs and the function of rental assistance programs. These results suggest that households that apply for and receive rental assistance differ in important ways from WCN renters or from very low-income unassisted renters in general. Specifically, more than one-half of rental assistance applicants are not rent burdened, because they are either doubled up with family or friends or receiving some form of housing assistance. These applicants may experience a variety of other housing-related hardships, however, including homelessness, substandard housing, and a lack of independence.
The results do not suggest that the WCN report is in error. The WCN measure is an assessment of housing needs among very low-income unassisted renters and does not claim to represent the housing needs of all rental assistance applicants. In addition, nothing requires that PHAs prioritize WCN applicants over applicants with other housing needs. The WCN report, however, is meant to inform our understanding of the need for housing assistance and the form that assistance should take. Housing policy experts sometimes use WCN households as a proxy for households that apply for and receive rental assistance. The survey results suggest that relying on the WCN measure to understand the effects of rental assistance overestimates the direct financial benefits of assistance in reducing housing costs and underestimates its benefits for increasing housing consumption. This reliance may also lead policy experts to underestimate the value of the nonfinancial components of rental assistance programs, such as housing quality standards.
The WCN measure would be more representative of rental assistance applicants if it included homeless people and households already receiving some form of government housing assistance.
Nearly one-fourth of rental assistance applicants fall into one of these two categories.
The WCN measure does not include homelessness because the AHS captures only people living in housing units. At the time the WCN measure was initially developed, no regular efforts were made to count the homeless, and national estimates of homelessness varied widely (Koebel and Rennecker, 2003). HUD now produces an Annual Homeless Assessment Report to Congress and 292 Refereed Papers The Housing Needs of Rental Assistance Applicants its estimates of homelessness have become increasingly precise. In 2010, almost 650,000 people were homeless on a single night and more than 1.6 million people used homeless shelters during a 12-month period (HUD, 2011). Despite the danger of double counting households that experience both homelessness and other WCN, including homeless households in the WCN report would lead to a more accurate picture of WCN and the need for rental assistance.
The WCN measure excludes households currently receiving some form of housing assistance, because these households are assumed to be living in adequate and affordable housing, but 16 percent of rental assistance applicants reported already receiving some form of housing subsidy.
Of those applicants, 25 percent were severely rent burdened and 55 percent reported at least one housing quality problem. Thus, some subsidized applicants appear to have serious housing problems. In addition, other studies of AHS data have shown that households often mistakenly believe that they are receiving housing assistance (Koebel and Renneckar, 2003). Excluding these households may cause the WCN report to underestimate the number of WCN households.
Although many rental assistance applicants were not rent burdened, they did experience a variety of hardships related to the quality of their housing. More than one-half of applicants reported one or more housing quality problems. This finding is surprising, because incidences of severely substandard housing, as measured by the WCN report, have become rare, which is often taken as an indication that even low-income renters live in housing that is physically adequate (Grigsby and Bourassa, 2004).