Extremely low-income renters in the United States are grappling with a severe shortage of available and affordable housing, according to a detailed report released by the National Low Income Housing Coalition (NLIHC). This issue has become increasingly critical, as an alarming one-quarter of all renter households fall into the extremely low-income category. This designation includes individuals and families who earn at or below the federal poverty level or 30% of their areas median income, depending on which is higher.

The report highlights a staggering shortfall of approximately 7.1 million rental homes that are affordable and available to the 10.9 million households classified as extremely low-income. Data analysis conducted by the NLIHC reveals that there are only 35 rental homes accessible for every 100 extremely low-income households nationwide. The lack of affordable options has led to a housing crisis that affects countless families across the country.

You can either boost their incomes through a demand-side subsidy, like a housing voucher as a choice voucher, said Dan Emmanuel, an author of the report and a research manager at NLIHC. Or you can construct units right and expand supply and target those units to extremely low-income renters. This statement underscores the urgent need for policy initiatives aimed at increasing the availability of affordable housing options for struggling renters.

The NLIHC's findings are based on data from the 2023 American Community Survey by the U.S. Census Bureau. The analysis integrated information on household economics and demographics to determine which rental units are affordable for each household, accounting for both rent and utility costs that ideally remain below 30% of a household's income.

Every state in the nation is facing a deficit of affordable housing for extremely low-income individuals, with Nevada experiencing the most severe shortage. In Nevada, there are only 17 affordable rentals available for every 100 extremely low-income households. On the other end of the spectrum, North Dakota is reported to have the highest availability, with 62 rentals per 100 extremely low-income households.

Interestingly, Massachusetts, known for having one of the most expensive housing markets in the country, ranks second for the availability of affordable rentals when considering its capital. Conversely, major cities in TexasHouston, Dallas, and Austinare among the top five cities facing the worst rental shortages, even though the median home price in Texas is roughly $40,000 lower than the national average.

Its much easier and cheaper to build housing in Texas, Emmanuel stated, referring to the less stringent regulatory environment that developers encounter in the Lone Star State. However, he cautioned that this does not automatically lead to greater affordability. Some states invest a lot more in housing assistance than other states do, he added, highlighting the disparities in housing policy across the nation.

Moreover, the report points out that many extremely low-income renters are employed in low-wage service sector jobs, such as retail positions or as home health aides. Emmanuel noted that a significant 42% of those in the extremely low-income bracket work over 40 hours a week, yet their earnings have not kept pace with soaring rent costs. This has resulted in nearly half of all renter households becoming cost-burdened, defined as spending more than 30% of their income on housing, according to data from the Census Bureau.

The national movement to raise the federal minimum wage to $15 per hour has coincided with a slight reduction in the shortage of affordable housing for extremely low-income renters in 2023 compared to the previous year, offering a glimmer of hope in a troubling scenario.

Moreover, certain demographic groups face even greater challenges in accessing affordable housing. Black, Latino, and Indigenous households are disproportionately represented among extremely low-income renters compared to their white counterparts. The history is employment discrimination and housing discrimination that kept communities of color out of homeownership and generating wealth and transmitting wealth generationally, Emmanuel explained, emphasizing the systemic issues that have contributed to this disparity.

As the housing crisis continues to unfold, the need for comprehensive policy solutions that address the root causes of housing unaffordability becomes increasingly urgent. If you have personal experiences or stories related to rising rent costs in your city, you are encouraged to reach out to this reporter at jdeng@businessinsider.com to share your insights.