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Wednesday, July 30, 2014

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Report: Lowest Income Renters Face Greatest Shortage of Affordable and Available Housing

For immediate release
Contact: Katherine Dibling, E-mail Public Affairs Specialist, (215) 574-4119

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A study conducted by the Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department compares housing affordability for renters in various income categories in the Third Federal Reserve District. The research concludes that while housing affordability challenges were greatest for extremely low-income (ELI) renters, affordability indicators worsened across the board for renters in the Third District between 2005 and 2010.

The study, “Affordability and Availability of Rental Housing in the Third Federal Reserve District: 2012,” was released today in the inaugural issue of Cascade Focus, a new publication that summarizes the department’s research on issues related to community development in low- and moderate-income communities and fair and impartial access to credit in underserved markets. Issues will be released periodically after research has been conducted on community development topics.

The department’s earlier rental housing studies, which are not directly comparable to this report, analyzed data through 2007 for Pennsylvania. This new study looks at data from 2005 through 2010 on rental housing throughout the Third Federal Reserve District, which includes eastern Pennsylvania, southern New Jersey, and Delaware.

The study concludes that:

  • There was a shortage of roughly 266,000 rental units affordable and available to ELI renter households in the Third Federal Reserve District in 2010.
  • The number of affordable and available rental units for every 100 ELI renter households in the Third District fell from 40 in 2005 to 34 in 2010.
  • In 2010, nearly three in four ELI renter households in the Third District spent more than half of their income on gross rent (including utilities) and thus were severely burdened by their housing costs.
  • Although housing cost burden levels were highest for ELI renters overall, increases were greatest for very low- and low-income renters between 2005 and 2010.

In addition to the report summarizing findings for the Third Federal Reserve District, the department also released tables with detailed data for states, metropolitan statistical areas (MSAs), and counties within the District, documentation on the data and methodology used in the study, and a map of the Third Federal Reserve District.

The Community Development Studies and Education Department supports the Federal Reserve System’s economic growth objectives by promoting community development in low- and moderate-income communities and fair and impartial access to credit in underserved markets. The department works closely with financial institutions, nonprofit organizations, and government agencies on public-private partnerships that result in increased affordable housing and community and economic development. The department assists financial institutions to understand their responsibilities under the federal Community Reinvestment Act (CRA).

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.

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