Housing & Homeless Needs Assesment: Housing Needs Assessment: |
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6. Discussion of Cost Burden and Severe Cost Burden
HUD defines cost burden as a household paying more than 30% of its gross income for housing costs including utilities, and a severe cost burden as a household paying more than 50% of its gross income for housing expenses including utilities. On page 9, HUD Table II.1 shows that were 2,955 low-income rental households and 2,337 low-income owner-occupied households in Iowa City. Table II.3 shows that the number of low-income renter households with a cost burden or severe cost burden was 1,504 or 51 percent. This compares to 955, or 41 percent low-income homeowners who had a cost burden or severe cost burden. The following table is a brief breakdown of households by tenure and income level, who have a cost burden or severe cost burden.
INCOME LEVEL |
COST BURDEN |
SEVERE COST BURDEN |
0-30% Median Income |
779 |
531 |
31-50% Median Income |
463 |
129 |
51-80% Median Income |
262 |
14 |
TOTAL |
1504 |
674 |
Source: HUD Office of Community Planning and Development, 1990 Census
OWNER-OCCUPIED HOUSEHOLDS
INCOME LEVEL |
COST BURDEN |
SEVERE COST BURDEN |
0-30% Median Income |
319 |
189 |
31-50% Median Income |
194 |
61 |
51-80% Median Income |
442 |
13 |
TOTAL |
955 |
263 |
Source: HUD Office of Community Planning and Development, 1990 Census
Small, related rental households and non-elderly homeowners are the two groups with the highest incidences of cost burden and severe cost burden, especially within the 0-30% median income categories. This is supported by the fact that 74% of households already receiving Section 8 assistance, reside in units that are two bedrooms or smaller. No data for homeowners, other than that presented in HUD Table II.1, is available to further support this statement as it relates to homeowners.
Since 1990 Fair Market Rent has decreased on efficiencies by 2.6%. One-bedroom units have increased by 3%. Fair Market Rents on two-bedroom, three-bedroom, and four-bedroom units have increased by 12.7%, 25%, and 32% respectively. During that same time period, median income for a family of four has increased by 41%. Presumably, there are fewer cost burdened households than in 1990 since median income rose by greater percentage than fair market rent. When the 2000 Census is completed we will be able to apply hard numbers to the above household and income categories.
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