- PCHTF
- Mar 14, 2024
- 2 min read
A new report by the National Low Income Housing Coalition (NLIHC) finds a national shortage of 7.3 million affordable and available rental homes for extremely low-income renter households – those with incomes at or below the poverty level or 30% of their area median income, whichever is greater – resulting in just 34 affordable and available rental homes for every 100 extremely low-income renter households nationwide. The report, The Gap: A Shortage of Affordable Homes, also reveals that there are 101,442 extremely low-income households in Iowa but only 43,065 affordable rental homes available to them, leaving only 42 affordable and available rental homes for every 100 extremely low-income households in the state.
Iowa has a shortage of 58,377 rental homes that are affordable and available to the state's extremely low income residents, according to NLIHC's latest analysis.
Released annually, The Gap investigates the severe shortage of affordable rental homes available to extremely low-income families and individuals nationwide and in every state and metro area. While rents have stabilized since the pandemic in most markets – and even declined to a small degree in some markets – the supply of affordable rental housing for extremely low-income households remains deeply inadequate nationwide and in Iowa. In consequence, 67% of extremely low-income renters in Iowa are severely housing cost-burdened, spending more than 50% of their income on housing, with little left over for food, healthcare, and other basic necessities.
Among extremely low income Iowa renters, two-thirds are severely cost burdened, meaning over half their income goes to pay rent.
The report also reveals that most rental markets provide an adequate supply of housing for middle-income renters but that no rental market provides enough homes for extremely low-income renters. Even in housing markets with shortages of affordable and available homes for middle-income renters, the cumulative shortage is largely attributable to the significant unmet housing needs of people with the lowest incomes, who must occupy higher-priced homes in the private market that would otherwise be available to higher-income renters.
To read the report, visit the NLIHC website: https://nlihc.org/gap
In 2023, the Trust Fund used NLIHC's methods and a slightly different dataset to create a version of this report specifically applicable to Polk County, Iowa. View it here:
The United Ways of Iowa and United for ALICE recently released a new report Alice in the Cross Currents: Covid and Financial Hardship in Iowa. The report is an update to United Way's analysis of Asset Limited, Income Constrained, Employed (ALICE) households across Iowa. It also provides major new insight into how low- and moderate-income families saw their situations change through the COVID-19 pandemic.
The report's key finding highlights the financial struggle facing many Iowa families:
According to United Way, 36% of Iowa households do not have the financial resources to afford a basic budget for financial survival.
While we often speak of people in our community who live in poverty, the ALICE report authors argue the government's official poverty measure falls short of identifying all the people struggling financially. ALICE households earn more than the Federal Poverty Level (FPL) yet still struggle to meet basic household expenses. The FPL, developed in the mid-1960s by Mollie Orshansky of the Social Security Administration, provided the first measurement of poverty in America.
The FPL operates under the assumption that a household spends about a third of its income on food. The USDA developed the Economy Food Plan that meets the nutritional needs of an individual at the lowest possible price. The FPL takes this number and triples the amount to produce poverty thresholds. There have been some changes since the inception of FPL, but these basic calculations form the poverty thresholds today.
The ALICE threshold provides an alternative--and arguably far more complete--measure of financial hardship by updating the assumptions of what financial hardship constitutes in the 21st century. Rather than a blunt tripling of an economical food basket, the ALICE Household Survival Budget includes housing, childcare, transportation, healthcare, taxes, technology (including a smartphone), and food. For a family of four, the 2021 FPL was $26,500, and the ALICE threshold was $61,308, providing a much higher threshold that better reflects financial hardship in Iowa.
Federal Poverty Limit, Iowa, 2021 | ALICE threshold, Iowa, 2021 |
$26,500 | $61,308 |
The ALICE report found 36% of Iowa households were below the ALICE threshold. A single person working full-time to exceed the threshold would have to make more than $12.10 per hour compared to $36.65 per hour for a family of four. In Polk County, 23% were below the ALICE threshold, and 9% were below the FPL.
In addition, the report sheds more light on who is struggling in Iowa communities.
Many workers in the most common occupations were below the ALICE threshold, including half of waitstaff, fast food, and counter workers.
Financial hardship was not evenly distributed across the various races of Iowa households, with 60% of Black households below the ALICE threshold compared to about 30% of White households.
The family form strongly affects financial hardship with over half of Single-Female-Headed (with children) households below the threshold compared to 14% of married (with children).
The Polk County Housing Trust Fund partners with many organizations and developers to create affordable housing for struggling families. We want to thank the United Way for its leadership and the creation of a novel measurement of financial hardship. You can find additional cost of living calculators and other local housing data in our Housing Policy Reading Room.
- Arie True-Funk
- May 4, 2023
- 1 min read
In 2021, Iowa had the second highest homeownership rates in the country following only West Virginia (Urban Institute, 2021). Our state offers lower cost of living, and Des Moines was named the 14th best places to live by U.S. News.
Unfortunately, not all groups are able to access homeownership at the same rate as white residents. Non-white Iowa residents have much lower homeownership rates as shown in the figure. Only 39.0% of Black households in Polk County own their homes compared to 72.1% of White households. A higher share of Polk County Black households are homeowners compared to the rest of the state at 32%. Other non-White households have higher rates of homeownership in Polk County with 41.6% of Hispanic households and 58.9% of Asian or Pacific Islander households.
The Polk County Housing Trust Fund partners with community organizations such as HOME, Inc., Neighborhood Finance Corporation, and the Greater Des Moines Habitat for Humanity to help households reach their goal of homeownership. These organizations, together with many lenders and others, recently contributed to an affordable homeownership guide available for download here. It details many of the free, confidential services available to help community members overcome barriers to owning a home.
Arie True-Funk is PCHTF's director of research and planning. She periodically shares key insights about local housing data here on PCHTF's blog. Have a housing topic you'd like to see us explore in a future post? Leave a comment below with your suggestion or idea.