How Inequality impacts housing

What is happening?

While the rental housing crisis affects Americans in every state in the country, it does not affect everyone equally. Low income Americans, communities of color, and seniors have all felt the burden of the crisis.

Low income Americans are getting hit the hardest by the rental housing crisis – with housing costs that have soared nearly 50% in the past 19 years.

Source: Pew’s Analysis of Bureau of Labor Statistics Consumer Expenditure Survey Public-Use Microdata 1996-2014

But affording a home isn’t the only challenge.

Where families live determine many aspects of their lives, including their access to quality education, having safe places to play, access to healthy, affordable food options, and more.

Ultimately where you live can determine your economic mobility. Research has found that children who grow up in safe, low-poverty neighborhoods – no matter their own family’s economic situation – improves their chances of success and may reduce the next generation’s poverty.

In fact, a recent Harvard study found that young children whose families used vouchers to live in better neighborhoods had a higher success rate as adults than those who stayed in extremely poor neighborhoods.

Source: Chetty et al., “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the moving to Opportunity Experiment,” National Bureau of Economic Research, Working Paper #21156, May 2015

Communities of color are disproportionately affected by housing insecurity, and the rent affordability crisis.

Source: CFED Assets & Opportunity Scorecard

Rising rent, combined with slow growth in wages, are having a big impact on these families’ overall financial health. Neighborworks America found that 34 percent of Americans report no emergency savings – and that number is even higher among communities of color. 50 percent of African-Americans and 42 percent of Hispanics reported no emergency savings in 2015. That’s up from 43 percent and 39 percent a year earlier.

Communities of color are also disproportionately affected by poverty, which means that a higher percent of African-Americans and Latinos are living in high-poverty neighborhoods.

Source: Jargowski, Architecture of Segregation, September 2015


There are also structural issues. While the Fair Housing Act of 1968 prohibits housing discrimination based on race, it does not prohibit discrimination based on income source – in many states allowing landlords to turn away low-income families using vouchers.

Seniors are also disproportionately affected by the rental housing crisis.
Between 2005 and 2014, the overall population of seniors age 65 and over increased by 25 percent nationwide, while the number of seniors paying more than half of their household income toward rent and utilities went up by 34 percent.

What can we do?

We believe that by expanding the supply of affordable homes, by strengthening public support for affordable homes and renter assistance programs, and by ensuring hard-working American families achieve financial stability, we can reverse this trend.

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