This indicator measures the percentage of low-income homeowner households who pay more than 50% of their income on housing costs. When households pay more than 50% of their income on housing, they are considered “severely cost burdened,” meaning they are paying much more than they can likely afford. A high proportion of cost burdened households can suggest high housing costs, low incomes, or both.

All residents should be able to afford adequate housing without giving up healthy food, medical care, or other necessities, or accepting unsafe housing conditions. When housing cost burdens are high, individuals and families must make difficult choices with limited options. They may experience unhealthy, poor-quality housing (see Housing Habitability), save money by living with others (see Uncrowded Housing), limit use of utilities, skip routine check-ups or wait to seek healthcare, and buy lower cost food. With budgets stretched to the breaking point, households also experience housing insecurity and are vulnerable to displacement from their homes and neighborhoods. Housing instability, crowding and homelessness are associated with: low birth weights, depression, behavioral problems, and educational delays for children; asthma, tuberculosis, and other communicable diseases; skipped meals and medical appointments or medication; social isolation; and loss of political voice. When low-income residents are forced to leave high cost areas, they often leave behind places rich with opportunity, and may need to commute long distances, straining budgets and worsening air quality and climate change.¹

Addressing severely cost burdened low-income homeowners requires a range of policy responses designed to make housing more affordable and stable, and to ensure that residents are economically secure.

In the short term, it is essential to Stabilize Residents and Neighborhoods to protect residents who might be forced to make unhealthy tradeoffs to pay for housing. Areas with high housing cost burdens, Crowding, Poverty and low educational attainment (High School Enrollment and Bachelor's Education), Per Capita Incomes and Homeownership are often more vulnerable to displacement, particularly when they are in, or close to, hot real estate markets, transit, and jobs centers. Researchers at the University of California, Berkeley have developed methodologies for understanding displacement risk and dynamics in the Bay Area and Los Angeles County. These easy to use tools are available here. For residents who are no longer housed, it is also important to House and Support People Without Homes.

Jurisdictions should also act quickly to Preserve and Improve Existing Housing. Relative to new production, these strategies can be extremely cost effective, and quickly improve conditions for residents. Consult your jurisdiction’s Housing Element, U.S. Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy (CHAS) data, and local homeless counts (if available) for more information about local housing conditions, partner with local community based organizations, affordable housing developers/residents, and others to identify community housing needs, and target policies and programs accordingly.

Over the long term, jurisdictions should Produce New Affordable Housing. Between 1980 and 2010 decades, California metropolitan areas produced approximately half (120,000/year) of the housing necessary to keep costs on par with the rest of the country,¹¹ and have been especially unsuccessful in producing housing affordable to low-income households. Consult your local housing element and Regional Housing Needs Allocation (RHNA) for more information about housing production relative to need.

In addition to the housing policies above, jurisdictions should also reduce housing cost burdens by improving residents’ economic security. Specifically, decision-makers can craft policies to Raise Wages and Benefits, Build Workforce Development and Pathways and Develop Community Economic Capacity. They should also help communities Build Wealth—focusing especially on offering quality financial products to allow residents save for homeownership and make mortgage payments. For more detailed information on these economic policies see our guides on: Poverty, Employment, and Per Capita Income.