Ann Carpenter
Community and Economic Development Department
Federal Reserve Bank of Atlanta

Douglas White
Shimberg Center for Housing Studies, University of Florida
Center for Business and Economic Research, Louisiana State University, Shreveport

Mary Hirt
Community and Economic Development Department
Federal Reserve Bank of Atlanta
Discussion Paper 2018-2
July 2018

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Housing data are available for most large metropolitan regions in the Atlanta Fed's Southeast region. However, many midsized metropolitan, micropolitan, and nonmetro areas lack detailed data on rental housing affordability and housing supply needs by income level. These data are important for state and local governments, affordable housing developers, and housing advocates to inform housing policy. Therefore, the Atlanta Fed partnered with the Shimberg Center at the University of Florida to analyze census data using a methodology developed for Shimberg's periodic Rental Market Study for the state of Florida (Shimberg Center for Housing Studies, 2013, 2016). This paper covers the six states that are fully or partially in the Atlanta Fed's District: Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.

In this paper, the authors provide a regional snapshot of housing affordability and the availability of affordable rental housing units at several scales for the Atlanta Fed's District, using data from the 2015 American Community Survey (ACS). They include figures for city, metropolitan, and state areas as well as regional figures for nonmetro areas. The authors segment the data by household income using the area median income (AMI) of each respective region. They provide estimates for renter households within five major income brackets: extremely low income (0 to 30 percent AMI), very low income (30.01 to 50 percent AMI), low income (50.01 to 80 percent AMI), moderate income (80.01 to 120 percent AMI), and upper income (more than 120 percent AMI).

The authors use two measures of housing affordability: 1) the share of cost-burdened households and 2) affordable and available rental housing supply. Metrics include the percent of cost-burdened renter households (people who pay more than 30 percent of their income on housing) and extremely cost-burdened renter households (people who pay more than 50 percent of their income on housing). Metrics also include the deficit or surplus in rental units that are both available and affordable to households at each of the above area median-income brackets. These measures tend to correlate, with high percentages of cost-burdened households associated with significant deficits in affordable and available units for low- and moderate-income households.

The results demonstrate the widespread lack of affordable housing in large metropolitan areas, small and midsized regions, and nonmetro regions throughout the Southeast. Although large metros such as Atlanta, Miami, Nashville, and New Orleans have received attention for the large increases in rent and subsequent affordability crises, markets such as Cape Coral and Orlando, Florida, and Savannah, Georgia, have similar or even higher levels of rent-burdened households. The authors also show that extremely low- and very low-income households are disproportionately cost burdened.

JEL classification: H53, R21, R31, R38

Key words: rental housing, affordable housing, low-income housing, housing cost burden

Acknowledgments: The authors thank Chris Cunningham, Karen Leone de Nie, Eileen Divringi, Bill O'Dell, and Anne Ray for their feedback on earlier drafts of this report. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.

The Shimberg Center for Housing Studies at the University of Florida provided data analysis support for this paper. The Shimberg Center and the Federal Reserve Bank of Atlanta prepared the paper jointly as part of the Atlanta Fed's Community and Economic Development Discussion Paper series.

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