The Positive Ripple Effect of Affordable Homes
Improving Availability of Subsidized Housing Increases Access to Stable Homes
A stable, decent, affordable home is an essential foundation for families to thrive. However, this foundation becomes increasingly unsteady when families’ housing becomes unaffordable — defined as paying more than 30 percent of monthly household income for rent or mortgage plus utilities. This brief introduces the Subsidized Housing Availability Index (“SHA Index”) as a tool to measure the need for additional housing subsidies, and to understand the relationship between inadequate subsidies and the negative consequences of housing insecurity.
How to calculate the Subsidized Housing Availability Index (SHAI)
The Subsidized Housing Availability Index (SHAI) characterizes existing subsidized units available to meet the needs of low-income households paying more than 30% of their income to rent. The index, which is expressed as a ratio or proportion, indicates the total number of subsidized units available in an area relative to the demand from low-income households paying more than 30% of their income to rent. The SHAI was developed using two separate data sets. The Picture of Subsidized Households (U.S. Department of Housing and Urban Development) was used to identify housing subsidy units, and median income from the American Community Survey (U.S. Census Bureau) was used to weight each city’s sample based on the racial/ethnic demographics of the Children’s HealthWatch data set. The SHAI can be calculated for a wide variety of locations as outlined below.
Step 1: Calculating the availability of subsidized units
The availability of subsidized housing units in each site (i.e. city) is defined as the total number of subsidized housing units, including those currently occupied and those unoccupied and available for rent, in the county within which the site is located (based on the Picture of Subsidized Households (U.S. Department of Housing and Urban Development) as follows:
We note, however, availability is defined as the existence of subsidized housing units, and does not necessarily mean those units are vacant. For example, the data set from the Picture of Subsidized Households—2008 (U.S. Department of Housing and Urban Development, 2008) reported occupancy rates above 90% for each of the subsidized housing types included in our analysis (Subsidized housing units included public housing, Housing Choice Vouchers, and Section 8 New Construction and Moderate Rehabilitation). This is also supported by the existence of extensive lengthy waiting lists for subsidized housing in all Children’s HealthWatch research site areas.
Step 2: Calculating the unmet need
The unmet need for subsidized housing units can be defined as the number of low-income households (annual median income < $35,000) currently paying more than 30% of their income on rent (based on 3-year average data from the American Community Survey, as follows:
Step 3: Calculating the total demand for subsidized housing
The total demand for subsidized housing from low-income households in a given location is calculated by summing the number of available subsidized housing units and the unmet need as follows:
Final Step: Calculating the SHAI
The SHA index is calculated by dividing the total number of affordable housing units available to low-income households (step 1) by the total demand for affordable housing from low-income households (steps 2 and 3), as follows:
Example: How the SHAI was calculated across 5 Children’s HealthWatch Research Sites
The SHA index shows some variability across the five research sites, although no site has more than a third of the estimated units required to meet the demand for subsidized units (see Table 1 below).