Chicago Needs More Affordable Housing, Study Finds

Chicago is gaining low-income households much faster than affordable housing, according to a study that the University of Illinois at Chicago’s Natalie P. Voorhees Center for Neighborhood and Community Improvement, the Chicago Rehab Network, Latinos United, and Housing Action Illinois conducted to appraise the current situation and assess what the mismatch may be by 2010.

Their report, “Affordable Housing Conditions and Outlook in Chicago: An Early Warning for Intervention", released last month, is a much more detailed analysis of data than what is ordinarily available for affordable housing. Instead of using summary data from the U.S. Census, which does not account for household size, researchers used Public Use Microdata Sample (PUMS) data. PUMS data are a 5 percent sample of the “raw” census survey data, which allowed the researchers to employ more precise measures of family income and to measure supply and demand in light of the size of the units that families of different sizes need. The results show an extreme lack of affordable housing options for low-income households in the city as 307,185, or nearly 30 percent of those households making less than 80 percent of area median income, are burdened with housing costs.   

“The housing stress is extremely acute for households earning less than $20,000, which is 25 percent of all Chicago households,” said Yittayih Zelalem, codirector of the Voorhees Center. “Seventy-two percent of those households spend more than 30 percent of their gross income for housing.”

The mismatch does not merely reflect an outright shortage of appropriate units. Although 178,030 extremely low-income households are paying more than 30 percent of their gross income for housing or are overcrowded in units smaller than they need, the actual shortage of units appropriate to these families is only 59,621. Households that could afford to pay more are occupying the remaining 118,409 units. Spending less than one could afford to spend on housing is fairly common among households in the moderate-income and high-income ranges. Seventeen percent of families making 81 percent to 120 percent of area median income and 59 percent of families making more than 120percent of area median income spend less than 30 percent of their income on housing. That higher-income households are occupying the units needed by those of lesser means is particularly troubling in light of current development trends, which target small households with high incomes.

“Building for the high end of the market isn’t working. High income people don’t necessarily want to buy or rent the most expensive units,” said Janet Smith, codirector of the Voorhees Center.

Looking ahead toward 2010, the report’s trend analysis indicates that, as development of those units continues, high-income households will continue to compete with low-income households for lower-priced units. The development of units appropriate for low-income families will continue to fail to keep pace with the development of affordable and suitable housing. The rental market will not meet the demand, and the supply-demand gap can be expected to increase, especially with the potential loss of existing units due to expiring Project-Based Section 8 and Low-Income Housing Tax Credit contracts, the loss of public housing units and the dedicated use of Housing Choice Vouchers for former public housing residents, and condominium conversions.

In light of the magnitude of the mismatch between the supply and demand for low-income housing, the study’s authors recommend taking action to halt and reverse the current trend: preserve and expand resources for affordable housing at all federal, state, and local levels; protect and preserve affordable rental housing resources and subsidies at risk of being lost; target plans and programs to address the greatest needs, such as extremely low-income rental housing and large family units; expand rental assistance programs at all levels to ease housing cost burdens; and employ other strategies such as inclusionary zoning, community land trusts, and incentive programs.

The full report, with a submarket analysis of the unbalanced development in the city and specific recommendations for submarket areas, is at www.uic.edu/cuppa/voorheesctr/publications.html.

For more information, contact the University of Illinois at Chicago’s Natalie P. Voorhees Center for Neighborhood and Community Improvement at 312.996.6336.