New Zillow study sheds light on racial
disparities in rent affordability as well as a nationwide shortfall
in housing assistance
- BIPOC households in the U.S. typically spend 34% of their
income on rent compared to 29% for the typical white renter
household.
- Roughly 19 million U.S. households qualify for housing
choice vouchers based on their income, but only 2.4 million
vouchers are available.
- Zillow recently launched a new listing feature that helps
inform renters of their rights and how to report source-of-income
discrimination.
SEATTLE, April 29,
2024 /PRNewswire/ -- A new Zillow report uncovers
deep-seated disparities in housing affordability across the
country, particularly between BIPOC and white renter households.
Although the magnitude of rent increases has slowed since the peak
in 2022, nearly half of all renter households remain
cost-burdened,1 with BIPOC households
disproportionately affected.
In 2022, the typical BIPOC renter household in the U.S. spent
34% of their income on rent, while white households spent 29%. More
alarming gaps appeared in several of the country's major metro
areas, such as New Orleans, where
BIPOC households spent 45% of their income on rent compared to 32%
for white households. Notably, the median income of white renter
households in New Orleans was 61%
higher than that of BIPOC renter households. Although racial income
gaps have narrowed over time, these figures underscore significant
and persistent inequalities in housing affordability.
"Despite a recent slowdown in rent hikes, rent burdens remain
critically high, particularly in BIPOC communities. These financial
pressures not only make homeownership increasingly elusive but also
contribute to a broader economic disparity," said Zillow senior
economist Orphe Divounguy. "Combined with a persistent housing
deficit and lower incomes, people of color have fewer housing
options, are less likely to own, and those who do own have lower
home values. We need focused efforts to tackle these issues, as
stable housing is key to improving health, education and economic
opportunities."
The Largest Racial and Ethnic Disparities in Rent Burdens
Among the Top 50 Metros
Metro
Area
|
Typical BIPOC
Household Rent
Burden (2022)
|
Typical White
Household Rent
Burden (2022)
|
New Orleans,
LA
|
45 %
|
32 %
|
Buffalo, NY
|
39 %
|
28 %
|
Cincinnati,
OH
|
37 %
|
27 %
|
Pittsburgh,
PA
|
36 %
|
26 %
|
Cleveland,
OH
|
36 %
|
28 %
|
Birmingham,
AL
|
40 %
|
31 %
|
Atlanta, GA
|
36 %
|
29 %
|
Memphis, TN
|
36 %
|
28 %
|
Chicago, IL
|
35 %
|
28 %
|
Boston, MA
|
41 %
|
34 %
|
Housing assistance programs can't keep up with rent
growth
The report also points to a critical shortage of housing
assistance. During the pandemic, the rapid surge in market rents
widened the gap between the number of households in need of
assistance and the number of available housing choice vouchers
(HCVs).
In 2022, roughly 19 million U.S. households qualified for HCVs
based on their income, but only 2.4 million vouchers were
available. In North Port, Florida
— a metro between Tampa and
Fort Myers — the number of
households that could be eligible for vouchers surged by 43%
between 2019 and 2022. Notably, metro areas in Florida represent half of the 10 metros with
the most significant increases in households that could be eligible
for HCVs.
Metro Areas with the Largest Increase in
Households with Incomes Eligible for Housing Choice Vouchers
Between 2019 and 2022
Metro
Area
|
Households with
Incomes 50% or Less of
Area Median Income in
2022
|
Total Renter
Households in 2022
|
Increase in
Income-
Eligible Households
Since 2019
|
North Port,
FL
|
40,846
|
98,546
|
43 %
|
Cape Coral,
FL
|
32,813
|
88,220
|
37.5 %
|
San Antonio,
TX
|
272,544
|
484,724
|
32.6 %
|
Orlando, FL
|
159,630
|
399,298
|
31.3 %
|
Lakeland, FL
|
34,185
|
84,336
|
29 %
|
Richmond, VA
|
106,333
|
213,951
|
26.3 %
|
Palm Bay, FL
|
24,247
|
61,389
|
26.2 %
|
Columbus, OH
|
219,266
|
423,454
|
24.8 %
|
Albany, NY
|
77,394
|
134,986
|
19.6 %
|
El Paso, TX
|
54,799
|
111,427
|
19.1 %
|
How vouchers work and how Zillow is getting
involved
Housing choice vouchers, also known as Section 8 vouchers, are
designed to help low-income families by paying rent subsidies
directly to landlords on behalf of the families. Families then pay
the difference between the actual rent and the amount subsidized by
the program, typically 30% of their income, up to a rent ceiling
based on fair market rent estimates from the Department of Housing
and Urban Development (HUD). Since 2023, HUD has incorporated the
Zillow Observed Rent Index (ZORI) into these estimates, making the
voucher program more responsive to current market conditions.
However, finding a suitable housing unit that accepts vouchers
remains a challenge. Despite antidiscrimination laws in some
regions, many landlords still do not accept vouchers, further
complicating the search for affordable housing.
To inform renters and landlords about applicable
source-of-income protections, every rental listing on Zillow
includes information about local discrimination laws. This
information appears under the "Local Legal Protections" tab on each
listing.
Zillow has also recently introduced a tool to help inform
renters of their rights and how to report source-of-income
discrimination. The new data-powered resource arms rental voucher
holders with information about local laws that protect them; it
also offers tips on finding and renting homes that fit their
criteria. The tool appears on those home listings on the Zillow
website where source-of-income laws are applicable.
Zillow is committed to supporting fair housing practices through
federal and state advocacy initiatives. One focus is advocating for
legislation to safeguard sources of income, such as housing
vouchers, from discriminatory practices in the housing market. By
advocating for bills that protect against income-based
discrimination, Zillow aims to ensure equal access to housing
opportunities for all individuals, regardless of their financial
circumstances.
About Zillow Group
Zillow Group, Inc.
(Nasdaq: Z and ZG) is
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more people. As the most visited real estate website in
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All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
1 This report uses the 2022
American Community Survey one-year sample.
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SOURCE Zillow