A new measure of housing affordability: Estimates and analytical results

Abstract

Affordable housing has often been described in terms of rent burden or owner cost burden. This article introduces the concept of housing‐induced poverty to describe the situation that arises when a household, after paying for housing, cannot afford the poverty basket of nonhousing goods. This is similar to Stone's shelter poverty concept, except that it is linked to a better‐known measure—the official poverty thresholds. On the basis of the 1999 American Housing Survey, it is estimated that 3.8 million households that were above the official thresholds could not afford the poverty basket of nonhousing goods. In 1999, the housing‐induced poverty rate in the United States was 2.7 percentage points higher than the official rate. Results from an analytical model reveal that regional and locational variables are significant determinants of the probability of housing‐induced poverty. Housing assistance significantly decreases the probability that near‐poor renters will fall into housing‐induced poverty.