Housing policy has the ability to exacerbate or mitigate extreme income inequality in American cities. Where incomes are growing and inequality is increasing, cities like New York and San Francisco, rising prices and rents can displace poor families. But affordable housing secures a place for low-income people in communities with growing tax bases and improved services. Having access to better schools, good transportation networks, recreational facilities, and other community services enables families to improve their quality of life and provide greater opportunities for their children.
Unfortunately, affordable housing is a scarce resource in many cities. America’s housing policy has never fully met the demand for affordable rental housing, and the number of households served by federal rental assistance has essentially plateaued. Today, only 24 percent of the 19 million eligible households receive assistance—basically, only one in four households wins the housing assistance lottery.
Who are those winners? How great is the need? What happens to those who don’t win? Our new whiteboard animation answers these questions.
The assistance lottery isn’t the only housing challenge that low-income families face. Across the country, only 3.2 million housing units are available at rents that are affordable for more than 11 million extremely low-income households. This leaves 8 million households—households earning 30 percent or less of the area’s median income, which ranges from $7,450 to $33,300, — spending a large portion of their income on rent, living in substandard housing, or both.
With such a large rent burden, these households can’t afford to pay for food, transportation to work or school, prescriptions, education or training, and other needs. Families with affordable housing have greater access to a chain of benefits, from better health to more resources for education. For example, families with affordable housing spend $151 more on food a month than families with severe housing burdens. Children who receive inadequate nutrition are sick more often, suffer growth and developmental impairments, and have lower educational achievement. From the very start, these children have more limited opportunities.
A growing body of research demonstrates that housing serves as a platform to connect families to services to improve health, education, and economic outcomes. As we learn more about the importance of housing as a platform for health, safety, and achievement, it is clear that greater rental assistance is needed at the local, state, and federal levels. If we want to reduce inequality, we can’t have children’s futures continue to be determined by the housing assistance lottery.
Look for more ideas about the role of housing assistance on our Housing Assistance Matters page. The Assisted Housing Initiative is a project of the Urban Institute, made possible by support from Housing Authority Insurance, Inc. (HAI, Inc.), to provide fact-based analysis about public and assisted housing.