falling from its peak of 69.4 percent in
2004. This precipitous drop is the result,
in part, of the estimated 5.2 million
home foreclosures that have been com-
...our nation is
pleted since September 2008.7
unprepared for
n The share of total home purchases by
the tremendous
first-time homebuyers has hit a 27-year
challenges that a
rents among the factors making it
rapidly expanding
renter population will
pose to the alreadystrained housing
system. Absent a
comprehensive and
sustained policy
low8, with student loan debt and higher
more difficult for young adults to save
for a mortgage down payment.
n More than a decade of stagnating
household incomes, a phenomenon
that began in the late 1990s, continues
to weigh heavily on family budgets
and puts homeownership out of reach
for many lower- and moderate-income
families. Some experts predict that
the national homeownership rate
response, it is likely
that rental cost
could eventually stabilize somewhere
between a high of 62 percent and a
low of 60 percent.
burdens will only
grow in intensity
and scope, undermining the stability
and dampening the
hopes of millions of
American families.
If these facts are not enough to give you
pause, consider that over the next five years,
America’s changing demographics are likely
to exacerbate the troubled conditions that
define housing today. New household formation by the Millennials, the increasing diversity of the U.S. population, higher expected
levels of immigration, and the aging of the 78
million Baby Boomers will all converge in a
way that substantially increases the alreadystrong demand for rental housing. In fact,
according to the Urban Institute, 62 percent
of new housing demand will be rental during
this decade (2010 to 2019).9
Most significantly, minorities will be the driving
force behind new household formation for
the foreseeable future. From 2010 to 2020,
6
it is expected that 8.9 million net new minority households will form, accounting for 77
percent of total household growth during this
period.10 From 2020 to 2030, minorities are projected to account for a staggering 88 percent
of household growth. With significantly lower
incomes and overall wealth than their white
counterparts, many of these households –
while desiring homeownership – will simply
not have the resources to meet mortgageunderwriting requirements. As a result, renting
will be their only housing option.
Unfortunately, our nation is unprepared for the
tremendous challenges that a rapidly expanding renter population will pose to the alreadystrained housing system. Absent a comprehensive and sustained policy response, it is
likely that rental cost burdens will only grow in
intensity and scope, undermining the stability and dampening the hopes of millions of
American families. These conditions, in turn,
will exacerbate income inequality, diminish
the prospects of social mobility for countless
individuals, make us less competitive in the
global marketplace, and ultimately hinder
America’s economic growth.
The stakes are high. Having access to safe and
affordable housing has long been recognized
as a critical part of America’s social compact
with its citizens. In the Housing Act of 1949,
Congress first established a clear national
policy objective: the realization as soon as
feasible of “a decent home and suitable living
environment for every American family.”
It has been more than 65 years since
Congress enacted this landmark legislation, yet achievement of this worthy goal
remains elusive.
The following pages more fully describe the
conditions that define the silent housing crisis
in America. A clear understanding of these
conditions is necessary if we are to develop
new, more effective approaches to help meet
the housing needs of the American people
both today and in the years ahead.
The Silent Housing Crisis: A Snapshot of Current and Future Conditions