Lost amid the much higher visibility mortgage crisis and the all too common foreclosure stories is the state of affordable rental housing in America. 

While the housing and economic downturn has slowed the development and construction of both single- and multifamily residential housing available to families earning 80% and above of area median family income (AMFI), that is not to imply an ample supply of affordable housing exists (especially for those earning less than 80% of AMFI).

According to the most recent Joint Center for Housing Studies report, vacancy rates for multifamily housing rose slightly in 2009.  However, the same study indicates that condo conversions to rental housing may be the likely reason for the increase in housing units. 

On the surface this rising vacancy number appears to be good news for working families with incomes at or below 80% AMFI as it suggests a housing oversupply.  Reality is quite the contrary. 

For one, the demand for the housing tax credit, which for more than 20 years has helped produce hundreds of thousands of affordable housing units, has stagnated.  In an effort to help fill the obvious financing gap and to off-set the drop in demand for credits, the Administration created the TCAP and Housing Credit Exchange programs.  However, it remains to be seen what positive effect the two programs will have in producing additional units of affordable housing.

Drilling deeper down the income strata, the picture looks far bleaker for those families earning below 40% of AMFI who more than likely require some sort of housing subsidy.  Even though the amount of funding for HUD Project-based Section 8 housing has grown over the last several years, they are basically helping the same number of people as rising rents and operating expenses have largely consumed the additional funds.  The same holds true for the sections 202 (elderly) and 811 housing programs (persons with disabilities).

The families and elderly residents who rely on this subsidy have few other choices when it comes to finding safe, sanitary, and decent housing as their incomes do not support the higher rent levels synonymous with most urban centers.  The discrepancy between real wages and what is necessary to afford a two-bedroom apartment in almost every major urban market continues to be dramatic. 

For example, in more than 30 states, two full-time minimum wage jobs are required to afford the fair market rent for a two-bedroom apartment.  And according to the 2009 National Low Income Housing Coalition (NLIHC) Report “Out of Reach,” the number of housing units affordable to families making less than $16,000 shrank by 17% between 1995 and 2005. The struggling economy and on-going housing crisis have exacerbated the problem as even more families are having difficulty making ends meet. 

Overlay on this burgeoning crisis is the need to preserve the existing supply of affordable rental housing.  To paraphrase the immortal Frankie Valli “let’s hang onto what we’ve got.”  According to the National Housing Trust, over the next five years, the contracts on more than 900,000 Section 8 units are scheduled to expire.  While very few owners typically opt out of the program, the number of those who are able to opt out will inevitably increase when real estate prices return to a higher level.  And it is estimated that another 200,000 existing affordable units will be at risk of conversion to non-affordable rents over the next 10 years as those contracts expire.

Recent legislation introduced will help keep more units affordable to low and very low income families by providing financial and other incentives to existing owners.  And during the Bush Administration we worked to extend the successful Mark-to Market program which helped keep tens of thousands of existing units affordable through the restructuring of existing mortgage financing. 

But given the shifting demographics and the fact many more low income senior citizens will be in need of affordable rental housing, more focus by policy makers is needed as the problem will only continue to exacerbate through inaction.

The time for bi-partisan focus and action is now.