Housing & Homeless Needs Assesment: Housing Needs Assessment:
Renters

Table II.1 shows that in 1990 there were 755 small related rental households between 0-30 percent of median income. Of these, 83% experienced some type of housing problem, 77% had a cost burden greater than 30% of their gross income and 56% had a cost burden greater than 50% of their gross income. Households in the 0-30 % income category have a maximum income of $16,300 (1999 HUD Income Guidelines) per year, $4,890 of which can be spent for housing costs annually (including utilities) or $407 per month. HUD establishes a fair market rent (FMR) for Iowa City annually. FMRs are established at the 40th percentile according to a rent survey conducted by HUD. Currently in Iowa City, the FMR for a two-bedroom unit with utilities is $567. All FMR and Income Guidelines figures include utilities. Even the highest earning households in this category incur a cost burden of $160 per month over the amount they can afford.

These figures also show that there were another 533 small, related rental households between 31-50% of median income. Of these, 71% experienced some type of housing problem, 61% had a cost burden greater than 30% of their gross income and 14% had a cost burden greater than 50% of their gross income. According to HUD 1999 Income Guidelines, the highest income possible for households in the 31-50% range is $27,200 per year, $8,160 of which can be spent for housing costs per year. This breaks down to $680 per month. Again, fair market rent for a two-bedroom unit is $567. If they can find one, households near 50% median income can just afford a two-bedroom apartment at fair market rent. Fair market rent for a three-bedroom unit is $787. If a household in this category needs three bedrooms it will incur a cost burden of $107 per month over what they can afford.

Last, data show that there were 867 small, related rental households between 51-80 percent of median income. Of these, 31% experienced some type of housing problem, 21% had a cost burden greater than 30% of their gross income and 1% had a cost burden greater than 50% of their gross income. The maximum income available to four person households in the 51-80% income range is $43,500 (1999 figure) per year. Of this amount $13,050 can be spent for all housing costs annually or $1,088 per month. Most of these households can afford a rental unit in the private market without rental assistance.

Data from Table II.1 show that there were 111 large related rental households between 0-30 percent of median income. Of these, 69% experienced some type of housing problem, 59% had a cost burden greater than 30% of their gross income and 37% had a cost burden greater than 50% of their gross income. Households in this income category have a maximum income of between $17,650 - $21,550 (5-8 persons), with an average of $19,600. This average serves as a useful proxy for all related households in this size category. Such a household can spend $5,880 for all housing costs or $490 per month. A three-bedroom apartment at fair market rent is $787 per month and a four-bedroom unit is $930 per month. These households obviously cannot afford units at fair market rent without substantial rental assistance.

Figures also show that there were another 76 large related rental households between 31-50 percent of median income. Of these, 79% experienced some type of housing problem, 49% had a cost burden greater than 30% of their gross income and 7% had a cost burden greater than 50% of their gross income. The households in this income category have a maximum average income of approximately $32,650. Thirty percent of this figure ($9,795) can be spent on housing costs, which is equal to $816 per month. Again, the ability to pay rent is lower than the cost of a four-bedroom rental unit at fair market rent ($930). However, these households should be able to just afford a three-bedroom unit at fair market rent ($787) without rental assistance. Also, the gap between ability to pay and the cost of a four-bedroom unit is not nearly as great as that for households in the 0-30% income group. This is significant improvement from 1994 when households in this income group could not afford a three-bedroom unit at fair market rent.

Last, data show that there were only 17 large related rental households between 51-80 percent of median income. Of these, 65% experienced some type of housing problem, 59% had a cost burden greater than 30% of their gross income and none had a cost burden greater than 50% of their gross income. Households in the 51-80% income category have an average income between $33,303 and $52,225 per year in 1999. Households at 51% of median income can spend $9,990 on housing costs annually or $833 per month. These households will incur a cost burden of $97 per month over what they can afford for a four-bedroom apartment. Averaging the income of large households at 80% of median income $15,668 can be spent annually for housing costs (including utilities) or $1,306 per month. Most of these households should be able to afford a rental unit in the private market without rental assistance.

Data show that there were 238 elderly rental households between 0-30 percent of median income. Of these, 60% experienced some type of housing problem, 56% had a cost burden greater than 30% of their gross income and 28% had a cost burden greater than 50% of their gross income.

Households at the high end of the 0-30 % income category have an income of $11,400 (1999 figure) per year, $3,420 of which can be spent for housing costs annually or $285 per month. Fair market rent for a one-bedroom unit is $441 (1999 figure). Comparing the figures, there is an approximate $156 per month cost burden to even the highest income households in this income category. This has increased from the $118 per month of cost burden found for the 1995 publication of CITY STEPS, an increase of approximately 32%.

Figures also show that there are another 195 elderly rental households between 31-50 percent of median income. Of these, 52% experience some type of housing problem, 52% have a cost burden greater than 30% of their gross income and 25% have a cost burden greater than 50% of their gross income. The households in this income category have a maximum income of $21,750 (1999 figure) per year, $6,525 of which can be spent annually for housing costs. This is equal to $544 per month. Again, fair market rent for a one-bedroom unit with utilities is $441 (1999 figure). This shows that the households near 50% median income can just afford a two-bedroom apartment at fair market rent. However, due in part to the large student population, apartments at fair market rent are difficult to obtain. Students tend to be able to afford more because they may live with other students in order to share housing costs. Families have the entire cost of housing upon them unlike students who are splitting costs.

Last, data show that there are 163 elderly rental households between 51-80 percent of median income. Of these, 43% experience some type of housing problem, 43% have a cost burden greater than 30% of their gross income and 3% have a cost burden greater than 50% of their gross income. These households have a maximum income of $34,800 per year. Thirty percent ($10,440) of which can be spent for housing costs annually or $870 per month. The majority of these households should be able to afford a rental unit in the private market without rental assistance.

According to Table II.1 there were 9,078 low-income renter households (out of 12,048 occupied rental units), of these, 2,995 are either elderly, small related or large related. This leaves 6,123 rental households that are either not related or consisting of single members. Determining the actual number of single households is not possible with the information available. However, common experience suggests that a vast majority of these 6,123 households are made up of non-related college students and that a low number of them are single-member households.

Estimates from the University of Iowa (1998) show that there are approximately 21,529 students living in Iowa City (with approximately 15,000 living in non-university rental housing). The 1996 Census figures show that there are 2.04 persons per occupied rental unit. By assuming the same percentage of incidences of being low income applies to the students (which is a very conservative estimate, since we believe that the vast majority of students are low income) there would be approximately 10,500 low income students, and at 2.04 persons per unit there would be approximately 5,000 low income student households.

If we use these rough estimates, there would be approximately 1,123 low income single households in Iowa City that are not students. Since there are no reliable figures on this group we cannot presume specific needs, however, there are some general needs that are apparent. First, single persons are not eligible for Housing Choice Voucher Program rent assistance unless they are disabled or elderly. Second, the number of single persons at the local emergency shelters is significant. Most of these individuals are employed but cannot afford a rental unit (fair market rent for an efficiency is $342 per month). It is apparent that very low-cost rental housing is needed for these working singles and rental assistance for the extremely low-income households under 30% median income. Third, having funds for security deposits and locating units are also problems for this group of renters.

The primary problem low-income rental households face is being cost burdened (i.e., paying too much for housing expenses). This predicament is due to the combination of low income and the relatively high cost of rental housing. Households under 30% of median have the greatest need for rental assistance. There are many households within the 31-50% median income group with a cost burden greater than 30% who also are in need of rental assistance. Additionally, there are several other problems that have been identified for these lower-income rental households. First, is the problem of coming up with the up-front cash necessary for a security deposit, generally equal to one or two month’s rent. Second, is the need for assistance in locating rental housing. Just because a household can afford a rental unit at fair market rent does not mean that they can find one due to the very low vacancy rates in Iowa City or due to the household's own inability to fully utilize the resources that are available to locate an apartment. Third, there is a need for some type of living skills training. Many lower-income households are evicted or in jeopardy of being evicted because of some problem with their landlord (rent paid late, damage, housekeeping). By providing some type of living skills training and/or intervention, a number of households could be helped to remain in a rental unit.