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Housing more difficult for low-income people to afford, HUD says

The number of renters experiencing “worst case” housing needs has increased by almost half since the beginning of the Great Recession, according to a just-released summary of a forthcoming report from the U.S. Department of Housing and Urban Development.

In 2007, there were 5.9 million very low-income households that were designated as having worst-case needs, according to the summary.

By 2011, 8.5 million households qualified as worst-case scenarios because their rent burdens were extreme — more than half of their income went to rent, HUD said. A small percentage also qualify as worst case situations because their living conditions are “severely inadequate,” the summary said.

That 43.5 percent increase “is due to substantial increases in rental housing demand and weakening incomes that increase competition for already-scarce affordable units,” said HUD’s preview of the report it plans to submit to Congress.

The increased demand for leased units is due mainly to a reduction in homeownership rates because of the proliferation of foreclosures and unemployment, HUD said.

“The entrance of former homeowners into the rental market is driving up costs for what little rental housing there was that low-income people could afford,” said Sheila Crowley, president and CEO of the National Low Income Housing Coalition, in a statement.

HUD calculates there are 19.3 million “very low-income renters” in the U.S., defined as households with incomes below 50 percent of the area median income.

“The data show that while the economy has been slowly recovering from the 2007–2009 recession, the economic benefits of recovery had not yet reached millions of very low-income renters in 2011,” HUD said.

Have a real estate news tip or experience to share? Email me at steve.kilar@baltsun.com.

Copyright © 2014, The Baltimore Sun
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