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Working & the Economy

Shortage of Affordable Rental Housing Hits Md. Poor Hardest

Baltimore rowhouses. Hank Mitchell/

Maryland faces a crisis in affordable rental housing – especially for low income residents.

A recent study on rental housing by the National Low Income Housing Coalition (NLIHC) found that Maryland faces a shortage of 118,810 affordable and accessible rental units for extremely low income households. 

Maryland is not unique: In its study, “The Gap,” NLIHC found there is no state in the U.S. with an adequate supply of affordable rental housing for extremely low income renters. Across the U.S., only 37 affordable and available rental homes exist for every 100 extremely low income households that earn less than 30 percent of the area median income. 

Extremely low income households make up 24 percent of renters in Maryland. According to the NLIHC, a four-person is classified as extremely low income in Maryland when its annual income is $29,640 or less. For every 100 extremely low income households in Maryland, only 33 rental dwellings are affordable and available.

“Research shows that the lack of stable housing can result in the loss of employment, interrupt student learning and decrease academic achievement,” the study said.

As part of the Washington, D.C., metro area, Montgomery County is located in one of the most expensive and competitive housing markets in the U.S. While wealthy families enjoy a surplus of housing options, less fortunate renters are struggling to contend with a housing shortage and high price tags on even the cheapest units.

The Montgomery County Department of Housing and Community Affairs (DHCA) conducted a rental housing study in 2017 which found that there are more households making less than 50 percent of the area median income ($58,600 for a family of four) than affordable rental units that are available in the region. The study found only 19 percent of rental units in Montgomery County are affordable to households with that level of income.

“This indicates that the current market for rental housing units is beyond the maximum affordability for these households,” the Montgomery County study reports, “providing price-appropriate units will likely require public investment such as subsidies because existing market forces and zoning regulations are not meeting this need.”

In order to guarantee more affordable housing will exist in Montgomery County, the county government must create incentives for developers to build affordable units who would otherwise market their housing to more profitable, higher-income families. Through Montgomery County’s Housing Initiative Fund (HIF), the county is able to provide subsidies, rental assistance and loans to developers and residents interested in building or renting affordable units.

“That’s a fund that can be used for building affordable housing from scratch, or, more often, buying and rehabilitating affordable units that might otherwise be removed from the overall supply,” said Montgomery County Councilmember Tom Hucker (D), a leading affordable housing advocate. 

The NLIHC study found that 86 percent of Maryland’s extremely low income rental households are extremely cost burdened, meaning they spend more than 30 percent of their income on housing costs alone. Maryland has some of the highest housing costs in the country, driving up the percentage of cost burdened households.

A shortage in affordable housing paired with an especially pricey housing market have pushed residents out of Montgomery County and into Frederick County, where the cost of living is cheaper. Because of this outflow of residents from the D.C. area, Frederick County is outpacing any other county in population growth, according to 2017 census data.

This presents new challenges for the county, which is beginning to face its own shortage in affordable housing and now must accommodate an increasing demand from the migration of residents from D.C. into Frederick.

“That’s a problem that you always face when you are not part of the urban core,” said Milton Bailey, the director of Housing and Community Development for Frederick County. “But as you rapidly become the third leg of the Baltimore-Washington stool, that becomes a greater reality.”

Frederick County’s own 2017 study on the rental housing market revealed that most new residents of Frederick are earning more than $100,000 per year, suggesting that population growth should not increase the demand for affordable housing, but might lead to existing units losing their affordability from an increasingly competitive housing market.

Though a growing population might put pressure on those searching for affordable housing, Bailey said an influx of wealthier residents will provide a new source of tax revenue that can be invested into more affordable units.

Montgomery County has the highest area median income in the state at $117,200 for a family of four. To raise funding for public housing, Montgomery County increased its transfer and recordation tax rate for homebuyers. Bailey said Frederick County officials are considering increasing their own rate for added investments into affordable housing.

Because the housing prices are largely controlled by developers who respond to the market, both Montgomery and Frederick counties have implemented programs that give tax breaks to developers who in turn agree to build affordable housing units. For example, Montgomery County exempts developers from development impact taxes if at least 25 percent of the new units are designated as affordable housing.

As local government has little influence over the regional housing market, Bailey urges county and state governments to turn to their members of Congress for relief for residents who are contending with the steep cost of housing.

The NLIHC study revealed that households with children who are extremely cost burdened spend 40 percent less on food than similarly poor households who do not face such daunting high rents. Seniors, who make up 29 percent of Maryland’s extremely low income households, spend 60 percent less on health care if they are cost burdened.

“These households forego healthy food or delay healthcare or medications to pay the rent,” the study reports.


Bailey said rental housing costs can be challenging to families who appear to have a reasonably stable income.

“We have a system that devalues going and getting an education because being able to afford housing that is 30 percent of your monthly income while paying off student debt or paying for childcare that is equivalent to a mortgage payment…it makes it very difficult for families making $75,000 a year to afford what is in Frederick County, Montgomery County, Washington D.C., or even Los Angeles markets,” he said.

While Maryland is struggling with a housing shortage that is not unique to the state, the NLIHC warns that if enacted, President Trump’s fiscal year 2020 budget request would lead to the “largest reduction to affordable housing investments in decades.” The NLIHC suggests that these budget cuts would lead to more than 200,000 families nationwide losing federal rental assistance and the elimination of programs that support state and local efforts to address the housing crisis.

“The Gap” study contends that “the lack of decent, accessible, and affordable housing, especially among people with the lowest incomes, is a significant barrier to housing and economic stability and other societal benefits.”

The study concludes “our nation must make the critical investments in our affordable housing needed to help the economy, our communities, families, and children thrive.”


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Shortage of Affordable Rental Housing Hits Md. Poor Hardest