The COVID-19 pandemic and its economic fallout have underscored the need for a strong housing safety net in the United States. COVID-19 was an economic catastrophe for many households precisely because so many already could not afford their homes and because the pre-pandemic housing assistance programs were not properly funded. The National Low Income Housing Coalition’s (NLIHC) recently published report, Out of Reach 2021, highlights the severity of this problem: in no state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home at fair market rent. In most Missouri counties, including our large metropolitan areas, a full-time minimum-wage worker cannot afford a one-bedroom rental home at fair market rent.
Housing assistance remains woefully inadequate and has not kept pace with the growing need: only one in four renters who needs housing assistance receives it. Currently, there is a national shortage of nearly seven million affordable and available homes for renters with extremely low incomes. For every 100 renters with extremely low incomes, there are only 37 affordable and available homes. Approximately 70% of extremely low-income renters are severely housing cost-burdened, spending more than half of their incomes on housing. The pandemic, which has caused sudden and unprecedented increases in unemployment, has increased the need for housing assistance even further.
Housing affordability is not just a problem for minimum-wage workers. The average renter’s hourly wage in Missouri is $15.62, more than a dollar per hour less than the needed wage to afford a two bedroom home in our state. Single parents who might need more bedrooms are in a bad situation in our state. Those Heads of Household would need to work 57 hours per week at the average renter wage to afford a three bedroom home. Nationally, the average renter’s wage is $1.62 below the national one-bedroom Housing Wage.
The high cost of housing is a racial justice issue as well. Due to historical and ongoing racial discrimination, people of color are more likely than white people to be renters, and higher proportions of Black and Latinx households are housing cost-burdened, extremely low-income renters. The economic crisis of 2020 had a disproportionate impact on Black and Latinx households, as they were more likely to lose employment income. A year after the start of the crisis, Black and Latinx renters were more likely than white renters to be behind on rent and less confident about paying future months’ rent on time. The economic recovery has been uneven, and low-wage Black and Latino workers will continue to struggle to afford their housing until long-term investments are made in affordable housing.
Housing affordability for low-wage workers and other extremely low-income renters is a national challenge. Out of Reach explains why federal policy is needed to address this challenge. These solutions include the expansion of rental assistance like the Housing Choice Voucher program, a significant increase in resources for the national Housing Trust Fund, adequate federal funds to renew Project- Based Rental Assistance and to repair public housing, a national emergency stabilization fund, and strengthened renter protections.
Nearly 11 million extremely low-income renter households, many of whom are seniors, people with disabilities, and families with small children, struggle to make hard choices between housing or other necessities like food, transportation, medical care, and childcare. Research shows that when people live in safe, decent, and accessible homes they can afford, they are better able to find and maintain employment, achieve economic mobility, and stay healthy. As we gradually recover from the pandemic and its economic fallout, we must support bold and sustained commitments to ensure that we do not return to a pre-crisis status quo where millions struggled to afford decent, accessible housing.
Policy and Advocacy Director