Report: Affordable-housing stock plummets

Rentals for low-income families fall 60 percent from 2010-2016.

The number of apartments deemed affordable for very low-income families across the United States fell by more than 60 percent between 2010 and 2016, according to a report by Freddie Mac.

The report by the government-backed mortgage financier is the first to compare rent increases in specific units over time. It examined loans that the corporation had financed twice between 2010 and 2016, allowing a comparison of the same rental units and how their affordability changed.

At first financing, 11 percent of nearly 100,000 rental units nationwide were deemed affordable for very low-income households. By the second financing, when the units were refinanced or sold, rents had increased so much that just 4 percent of the same units were categorized as affordable.

“We have a rapidly diminishing supply of affordable housing, with rent growth outstripping income growth in most major metro areas,” said David Brickman, executive vice president and head of Freddie Mac Multifamily. “This doesn’t just reflect a change in the housing stock.”

Rather, he said, affordable housing without a government subsidy is becoming extinct. More renters flooded the market after people lost their homes in the housing crisis. The apartment vacancy rate was 8 percent in 2009, compared to 4 percent in 2017. That trend, coupled with a stagnant supply of apartments, resulted in increased rents.

The study defined “very low income” as households making less than 50 percent of the area median income, and “affordable” rent as costing less than 30 percent of household income.

The report found a significant drop in the percentage of affordable units in seven of the nine states.

Colorado and North Carolina had the greatest gaps. At first financing, 32 percent of the units in Colorado were considered affordable for very low-income families; at second financing, only 8 percent were deemed affordable. In North Carolina, the percentage of affordable apartments dropped from 10 percent to 0.3 percent.

Rental affordability for very low-income families also declined in Arizona, Georgia, Nevada, Texas and Washington.