Congress must ease inflation by making housing more affordable

Americans are feeling the impact of historic inflation, and rising rents are a primary driver. The price of housing is by far the largest category in the Consumer Price Index and one of the greatest contributors to the inflationary pressure squeezing all households, especially those with the lowest incomes. In restarting negotiations on a major spending package, Congress and the Biden administration have a crucial opportunity to tackle inflation and ensure that America’s lowest-income and most marginalized people can get and stay stably housed.

Even before the pandemic, millions of households were struggling to keep roofs over their heads, always just one financial shock away from falling behind on rent and being threatened with eviction, and in the worst cases homelessness. Then came COVID-19. By August 2020, according to the best available data, as many as 12 million households were at risk of losing their homes without immediate governmental action. Many were among those already struggling to pay rent when the pandemic brought sudden job losses, reduced work hours, and higher costs for health care, childcare, and the internet. Advocates sounded the alarm, and federal, state, and local governments took heed, providing unprecedented resources and protections to keep tenants housed.  

Emergency rental assistance and eviction moratoriums were essential protections. Yet they offered only a temporary patch for the gaping holes in our social safety net. Now, as pandemic-era renter protections expire and resources are depleted, renters are encountering a housing market upended by soaring inflation. Last year, the cost of rent rose on average 14 percent nationally, with some cities seeing rent increases as high as 40 percent. Rents are expected to rise another 10 percent this year. These price increases affect renters of all incomes but threaten the lowest-income renters most of all. 

Skyrocketing rents are in part a consequence of the severe shortage of affordable homes for renters with the lowest incomes. There is a national shortage of 7 million homes affordable and available to renters with extremely low incomes, and fewer than four affordable and available homes exist for every 10 of the lowest-income households. Not a single state or Congressional district has enough affordable homes to meet the demand. 

Without affordable options, 10 million of the lowest-income households spend over half their incomes on rent, depriving them of the resources needed to put food on the table, purchase medications, and make ends meet. Renters need an annual income of nearly $50,000 — or $23.96 an hour — on average to afford a typical two-bedroom apartment. In many parts of the country, they need to earn much more. For many working families, seniors, and people with disabilities, incomes like these are completely out of reach.

People of color are disproportionately impacted. Black households account for 13 percent of all households but a quarter of all extremely low-income renters and nearly half of people experiencing homelessness. Latino households, who make up 12 percent of the total population, account for 21 percent of extremely low-income renters and 22 percent of people without homes. Native Americans are significantly overrepresented among people experiencing homelessness, and the harms are compounded for women of color. 

The tragic and preventable results of the housing crisis are visible everywhere you look. Eviction filing rates are increasing throughout the country and, in some communities, surpassing pre-pandemic levels. When America’s lowest-income renters lose their homes, they have few options available to them. Most double or triple up with other families in overcrowded homes. Many become homeless and resort to staying in congregate shelters. And on any given night in America, more than 200,000 people are sleeping in tents, cars, and other areas not fit for human habitation.

With rents rising rapidly, homelessness worsening, and millions of families struggling to stay housed, federal investments are desperately needed and long overdue. Congress was close to providing vital funding through the Build Back Better Act passed last year by the House of Representatives. The bill included historic and targeted housing investments, including $25 billion to expand rental assistance to 300,000 new households, $65 billion to preserve public housing for its 2 million residents, and $15 billion to build 150,000 homes affordable to people with the lowest incomes.

In December, however, Sen. Joe Manchin (D-W.Va.) announced his opposition to Build Back Better and effectively killed the bill. Now, the White House, congressional leaders, and Manchin have restarted negotiations over a new, scaled-down spending bill that would increase federal revenues by raising taxes on corporations and high-income earners, create savings by reducing the costs of prescription drugs, and use the resources generated to address the deficit, climate change, and inflation. 

If these members of Congress and the administration are sincere in their desire to bring down inflation, they should ensure the new bill includes robust measures to lower the cost of housing. Congress must retain the essential housing investments included in the Build Back Better Act — in rental assistance, public housing, and the national Housing Trust Fund — in any final reconciliation bill. By doing so, Congress will take an important step toward curbing inflation and ensuring that more of America’s lowest-income and most marginalized people have stable, affordable homes.

Diane Yentel is the president and CEO of the National Low Income Housing Coalition.