• Nearly half of U.S. renter households in large metro areas are rent-burdened — that is, they spend more than 30% of their income on monthly rent.
• BIPOC renter households are more likely than other households to be rent-burdened.
• Roughly 19 million households met the income criteria for Housing Choice Voucher eligibility in 2022, but only 2.4 million vouchers were available. 
• In 25 of the nation’s 100 largest metro areas, there were more than 10 times as many cost-burdened renter households as there were available vouchers. 

Although the magnitude of rent increases has slowed in the past couple of years, incomes haven’t yet caught up. As a result, the share of take-home pay that a renter household needs to dedicate to their monthly rent remains higher compared to before the pandemic.

The situation is particularly challenging for a large share of renter households. Of the approximately 39 million households who rent their home in one of the country’s 100 largest metro areas, 19 million of them — or slightly below half — are required to pay more than 30% of their income in order to cover monthly rent. Households that exceed this 30% threshold are commonly considered to be “rent-burdened.”

The U.S. Department of Housing and Urban Development (HUD) has long played a crucial role in providing rental assistance to low-income renters, particularly through the use of Housing Choice Vouchers (HCVs). Vouchers are a crucial form of assistance for many cost-burdened renters. However, unfortunately, the number of available vouchers simply hasn’t kept up with the need for assistance.

Funding limits that have left many income-eligible households without rental assistance were already a challenge for the market before the pandemic. The need for vouchers has increased since then. During the pandemic, the rapid surge in market rents meant the gap between the number of households in need of assistance and the number of available vouchers increased. 

Where the Number of Rent-Burdened Households Exceeded the Number of Vouchers

The number of households affected by these dynamics is substantial. As of 2022, there were approximately 19 million rent-burdened households nationwide – households that spend more than 30% of their income on monthly rent payments. Of those, roughly half — 9.4 million households — were severely rent-burdened, spending more than half of their income on monthly rent.

Voucher eligibility is calculated somewhat differently – incorporating elements like family size and how a family’s income compares with the median income in their county or metropolitan area – but it shows a similar figure: As many as 18.6 million U.S. households met the income criteria for voucher eligibility in 2022. Despite the need for assistance, a smaller number of households would qualify due to immigration status requirements and limits on the number of rental units at or below fair market rent. 

In total, the Housing Choice Voucher program only provides aid to 2.4 million cost-burdened families and individuals, leaving many behind. When rent increases faster than income, the risk of eviction and homelessness increases. Eviction raises housing instability with the probability of subsequent moves within two years of an eviction increasing by 80%-90%, while also raising the likelihood that an evicted family applies for shelter. Evictions also have a large negative impact on the health outcomes of evicted tenants, leading to more emergency room visits and mental health hospitalizations. Better funding for the Housing Choice Voucher program would likely be a positive step in reducing the rising flow of families into homelessness.

How Vouchers Work and Current Program Limitations

Housing Choice Vouchers, also known as Section 8 vouchers, pay rent subsidies for many low-income families. The housing subsidy is paid to the landlord directly on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. Voucher holders typically pay 30% of their income as rent and the government pays the rest up to a rent ceiling.  That rent ceiling depends on estimates of “fair market rent” at the county or metro level, constructed by HUD. Since 2023, HUD has incorporated the Zillow Observed Rent Index (ZORI) into these estimates, making the voucher program more responsive to current market conditions. 

To use the voucher, recipients must find a suitable housing unit with a landlord that will accept a voucher. Unfortunately, Congress authorizes and funds a limited number of vouchers each year. In addition, some landlords do not accept vouchers, making it difficult even for voucher recipients to find a unit that meets their needs. While some regions have laws that make discriminating against voucher recipients illegal, many do not. 

Racial Disparities

These rent burdens were not distributed equally across households and different communities. BIPOC (Black, Indigenous, and people of color) households face higher rent burdens compared to households headed by people of other races. Specifically, in 2022, the typical BIPOC renter household spent 34% of its income on rent compared to just 29% for the typical white household that rents. Research shows that homelessness rises faster when rent affordability surpasses the 32% threshold, explaining why BIPOC households are more at risk of becoming homeless. 

But even for those who remain housed, the disproportionately higher financial strains for BIPOC households also hinder savings for down payments, making homeownership more elusive. The result is a highly disparate economy where certain groups are priced out of both the rental and the for-sale housing markets, underscoring the need for housing assistance. 

How Zillow Is Getting Involved

Zillow is committed to supporting fair housing practices through federal and state advocacy initiatives, working towards creating inclusive communities where every individual has the opportunity to secure quality housing that meets their needs. One focus is advocating for legislation to safeguard sources of income, such as housing vouchers, from discriminatory practices in the housing market.

Zillow actively supports the Choice in Affordable Housing Act to improve HUD’s Housing Choice Voucher program, addressing programmatic barriers and motivating landlord participation. This effort aims to expand housing options for low-income individuals and families, promote housing affordability, and reduce barriers to safe and stable housing.

By advocating for bills that protect against income-based discrimination, Zillow aims to ensure equal access to housing opportunities for all individuals, regardless of their financial circumstances.

[1] This report uses the 2022 American Community Survey 1-year sample
[2] Eligibility for a housing voucher is based on the total annual gross income and household size. To be eligible for a voucher, a household must generally have income below 50 percent of the area median income (AMI) for the county or metropolitan area in which they reside. Households with income up to 80 percent of AMI who meet certain criteria may also qualify. Households must have at least one citizen or person with eligible immigrant status. People who are not lawfully residing in the United States or are temporarily in the United States through a student or work visa are ineligible for assistance. With certain exceptions, college students who do not live with their parents are ineligible for assistance. This analysis provides an estimate for the number of households with household incomes at or below the 50 percent AMI threshold provided by HUD and does not apply other eligibility constraints – such as immigrant status – since the American Community Survey does not provide detailed immigration status.