New Senate Report: Demand for Affordable Housing Exploding, Construction Not Keeping Pace
Seniors & veterans at greater risk for homelessness
60 percent increase in need for affordable homes, number of Americans facing extreme housing unaffordability
Cantwell, Hatch legislation would help build 400,000 additional affordable housing units across U.S, create an additional 452,000 jobs
WASHINGTON, D.C. – Today, U.S. Senate Finance Committee member Maria Cantwell (D-WA) released a new report on the nationwide affordable housing crisis. Cantwell’s report details the exploding demand for affordable housing and the dramatic decrease in affordable units.
Cantwell’s report found that the crisis has been fueled by three key factors: increase of 9 million renters since 2005 – the largest increase on record, the removal of 13 percent of existing affordable housing units and stagnant wages.
“The affordable housing crisis is exploding all across the country. We are facing pressures from all sides: demand for rental housing has increased by 21 percent, but we are building units at the lowest rate since the 1970s,” said Cantwell. “If we do not act to increase the Low-Income Housing Tax Credit – our best way to build new affordable homes – by 2025 over 15 million Americans could be spending half their income on rent. This is unacceptable.”
From 2000 to 2013, the total number of Americans facing extreme housing unaffordability has ballooned from 7 million to 11.2 million – a near 60 percent increase. In addition, there is a nationwide shortage of 7.4 million affordable rental homes, an increase from the 4.6 million gap in 2000.
In Washington, state the affordable housing crisis is getting worse at a faster pace:
Since 2000, median rents rose by 7.6 percent -- 2.5 percentage points higher than the rest of the country. In addition, there are 16 percent fewer rental homes available in Washington state compared to US average. Overall, 400,000 Washington households are paying half their monthly income in rent.
- By mid-2015, 43 million families and individuals were renters, a 19% increase from 2005 to nearly 9 million – the largest gain in the number of renters in any 10-year period on record.
- Between 2001 and 2013, the United States lost nearly 13 percent of its existing affordable rental housing.
- From 2000 to 2013, the total number of Americans facing extreme housing unaffordability has exploded from 7 million to 11.2 million – a nearly 60 percent increase.
- Seniors, veterans and the homeless are driving increased demand. From 2001 to 2011, the number of severely cost burdened seniors rose from 1.3 million to 1.6 million, a 30 percent increase.
- By 2025 nearly 15 million Americans could be spending half of their monthly income on rent – an increase of 25 percent
- If we do nothing, the number of seniors experiencing extreme housing unaffordability will increase of nearly 60 percent by 2025 – a total of 2.7 million.
To help solve the challenges of the increased demand in affordable housing, Cantwell re-introduced today, along with Senate Finance Committee Chairman Orrin Hatch (R-Utah), the bipartisan Affordable Housing Credit Improvement Act to strengthen and expand the Low Income Housing Tax Credit (LIHTC) by 50 percent. Under the Cantwell/Hatch proposal, the expanded LIHTC would help create or preserve approximately 1,300,000 affordable homes over a 10 year period – an increase of 400,000 more units than is possible under the current program.
According to the National Association of Home Builders, annual LIHTC development supports approximately 95,700 jobs and $9.1 billion in wages and business income. Enacting the Cantwell-Hatch proposal would create an additional 452,000 jobs over the next 10 years supporting the construction of additional units.
The bill also makes critical reforms to the existing program, including provisions allowing the 58,000 homeless students in the U.S. to finally take advantage of the affordable housing units created with LIHTC, expanding development opportunities in rural and Native communities and providing flexibility and financial feasibility to developments so they can more deeply target their units to the neediest individuals, including the homeless.
Cantwell and Hatch were joined by Senator Ron Wyden (D-OR), ranking member of the Finance Committee; Senator Charles Schumer (D-NY), the Democratic Leader; and Senators Cory Booker (D-NJ), Dean Heller (R-NV), Leahy (D-VT), Jeff Merkley (D-OR), Lisa Murkowski (R-AK), Brian Schatz (D-HI), Todd Young (R-IN) and the ACTION Campaign -- a coalition of over 2,000 affordable housing organizations across the country also supports this critical legislation.
Over the past year, Cantwell, along with the ACTION Campaign built support for expanding the Low Income Housing Tax Credit across Washington state and the country. Cantwell has met with stakeholders and visited affordable housing developments at events in Seattle, Tacoma, Spokane, Vancouver, Walla Walla, Longview, Kent, Bremerton, Bellingham, Portland, New York City and Salt Lake City.
In December of 2015, Cantwell championed the LIHTC and secured a critical fix to the program by permanently extending the credit rates to 9 percent of eligible costs on new construction. This ended an era when variable rates made financing of affordable housing less predictable.
Since its creation 30 years ago, this tax credit has financed nearly 2.9 million homes across the United States, leveraging more than $100 billion in private investment. Between 1986 and 2013, more than 13.3 million people have lived in homes that have been financed by the LIHTC.
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