Behind the Metric: Excessive Housing Cost

Many households across the nation are facing excessive costs. Affordable housing has been a priority campaign topic for many politicians, some of whom have introduced housing plans to address the lack of affordable housing due to excessive housing cost. The City Health Dashboard includes a measure of excessive housing cost which shows the percent of households spending more than 30% of their income on housing costs, either rent or mortgage payments. Across the nation’s 500 largest cities, on average, 37% of households are cost-burdened.

While housing is certainly an important issue on top of many peoples’ minds, it might not be the most obvious measure for a health data site. Yet, excessive housing cost has been associated with a number of negative health outcomes, including increased risk of infectious disease transmission, respiratory issues, and poor mental health. One link to these health issues is caused by trade-offs that many individuals have to make between having a roof over their head and visiting a doctor. Another is that with rising housing costs, people from low-income communities can end up in poor quality housing, resulting in their being exposed to conditions such as mold, poor water quality, and poor ventilation systems.

Excessive housing cost burden affects residents of all ages, from millennials to seniors. However, the burden disproportionately affects certain racial/ethnic groups. For example, black and Hispanic households are nearly twice as likely to be cost-burdened compared to white households. This disparity contributes to health inequities within communities.

For these reasons, we present the excessive housing cost burden metric on the Dashboard at both the city and census tract level, allowing users to investigate these comparisons between neighborhoods within their city. 

A more complete picture of housing

Rising housing costs can have far-reaching implications. Between 2006 and 2014, average rents increased by 22% across the United States, while average incomes declined. When incomes are lower, housing costs consume a larger proportion of a family’s take home pay. This leaves less to spend on health care, transportation, nutritious foods, and other necessities, which can lead to poorer health. Housing cost burden remains a problem when incomes are lower, even in cities that are generally known to be affordable. Because our Dashboard metric shows housing cost relative to household income, it provides more information on affordability than a measure of average rents alone, or something similar, might provide.

Looking at the distribution of excessive housing cost across cities with populations of 66,000 or more, a clear pattern emerges. Coastal cities tend to have higher than average rates of excessive housing costs than those in the middle of the country, but smaller southeast cities also struggle.

When housing costs rise, so can homelessness

Between 2009 and 2017, the total number of cost burdened households, which includes both renters and homeowners, decreased. But looking at renters alone tells a different story. In areas across the country, excessive housing cost for renter households has actually increased since 2009.

Recent trends have also shown that cities across the United States with increasing rates of cost burdened renters are also more likely to experience a rising homeless population. Because rent increases have outpaced income growth, more people, even those with higher salaries, are competing for a limited number of affordable housing options. For vulnerable communities, these increases in housing costs, however small, can push households into homelessness, which is another strong indicator of both poor physical and mental health.

In 2018, the Department of Housing and Urban Development (HUD) released a report that estimated the national homeless population as more than 500,000 individuals. It also showed the variation in homelessness in states and cities across the country, making the case for granular data to tell a more complete story of what communities are facing on a local level. Though the Dashboard does not report a measure of homelessness, local housing advocates and policy makers can use our city and neighborhood-level data on excessive housing cost to better understand what may be driving the homeless rates in their community. This local, granular data can help cities set priorities and focus resources to the areas with greatest need to improve health and equity for everyone in their communities.

When, on average, 22% or more of household income is spent on rent, the rate of homelessness in a community begins to increase. Notably, homelessness increases at a much higher rate when an average of 32% or more of household income is spent on rent.

Harness our data and take action in your community

Our goal is that users will harness the power of data to create change in their neighborhoods and cities. Here are some programs and policies that can help increase access to affordable housing in your community:

• The HOME Investment Partnership Program (HOME) is one way to increase access to affordable quality housing and potentially increase homeownership. This HUD funded program provides grants to increase affordable housing and can provide families with rental assistance. 

• Low Income Housing Tax Credits (LIHTCs) are federal tax credits which help to substantially offset the cost of developing or renovating low-income units in rental housing developments. This can improve housing affordability, especially for low-income families. Other potential benefits of this policy include reduced crime and increased neighborhood diversity.

• Tenant-based rental assistance programs, such as providing vouchers or cash, have been shown to help residents move to safer neighborhoods.

This is only a small sample of the strategies cities can use to address excessive housing cost and increase affordable housing opportunities for everyone. You can explore your community’s data and take it even further by discovering all of the housing-related resources the Dashboard has to offer. Let us know what’s working in your community by connecting with us on social media or emailing us at [email protected].

Interested in a more technical overview of this measure? Please see our Technical Documentation, Part 1.