For too many Peoria families, affordable rental housing is out of reach.
Forty percent of Peoria's households are renters. Of that 40%, about a third are considered low-income. That's according to a recent market study conducted for Phoenix Community Development Services, a not-for-profit which assists people with housing.
"In our market area, there are 15,560 low income qualified households for affordable housing units. So that's the unmet need currently right now," said Christine Kahl, director of Phoenix Community Development Services. "So even as we're proposing to develop a 55-unit (development), you see that that's just a drop in the bucket to meet the need."
The U.S. Department of Housing and Urban Development defines low-income as a person or household making less than 80 percent of the area's median annual income. Bob Palmer, the policy director for Housing Action Illinois, said in 2022 that was around $27,750 for a family of four living in Peoria, or $17,950 for an individual.
The situation is even more stark for households defined as extremely low-income, or those making 30% or less of the area's annual median income. A recent study from Housing Action Illinois and the National Low Income Housing Coalitionfound there's around 444,000 extremely low-income renter households in the state of Illinois, but only about 150,000 affordable rental homes available. That's a supply gap of nearly 300,000 units.
"Even among those extremely low income renter households who are housed, about three quarters of them are paying more than 50% of their income in housing, which means that they don't have much money leftover for the other necessities of life, like food, transportation, etc.," Palmer said. "And it means that they're at risk of homelessness if they were to have a significant rent increase or a loss of income."
Members of the extremely low income population are often people with disabilities, or people trying to end their own homelessness.
There are also racial disparities in Peoria housing data, per a new report from the city and county's Joint Commission on Racial Justice and Equity.
66.8% of Black families in Peoria County rent their homes, compared to the national average of 58%. Over 50% of Black and Hispanic families in Peoria County have rent burdens over 30% of their income; and nearly one-third have burdens of 50% or more.
Palmer said he believes the solution will have to come from the public sector. He said the private sector often isn't serving the extremely low income renters, even among those developers who specialize in low-income housing.
"In the for-profit sector that's doing affordable housing, they tend to focus on populations it might be easier to serve financially, or in terms of getting community support, like seniors or people with average higher median income, like closer to 60, or 80%, of the area median income," said Palmer.
Kahl said it's difficult for a for-profit business to sustain an extremely low income renter base.
"Part of the issue is that there's the money to build your place, but then once you open it, what does it cost to continue to operate, and the funding streams that are available to help you with that? The margins are very small," she said. "I mean, you know, in one of my developments, right now, more than half of the population there are zero income. So the only source of income coming in is a rental subsidy."
That subsidy is $389 a month. Kahl said supporting 30 units on that subsidy alone isn't sustainable. She said it's easier for a nonprofit to manage than a for-profit business, but even then, it's challenging.
The Illinois Housing Council, a coalition of businesses and nonprofits, is backing passage of legislation that would create new "Build Illinois Homes" tax credits. They would cost Illinois $35 million over ten years, incentivizing the construction of about 3,500 additional affordable housing units each year.
Money aimed at creating new housing for people to own is considerably more difficult to obtain for nonprofits and developers than the 9% Low Income Housing tax credits awarded through the Illinois Housing Development Authority for construction of new rentals.
"The homeownership money for single family homes is very difficult to find," she said. "There's often down payment assistance, but there's rarely money available to build homes, and have the subsidy that would be needed to build brand new housing," Jane Genzel of the Peoria Opportunities Foundation told WCBU in an interview earlier this month.
Genzel noted the application process for those tax credits are also extremely competitive. About 75 applications were submitted for the credits, which become available only once a year.
On the federal level, Palmer said more Housing Choice Vouchers could also help. Currently, he said only about one in four eligible households are receiving some kind of housing assistance. The president supports boosting the program, while congressional Republicans say they want to instead cut the number of vouchers.
Ultimately, Kahl said preventing homelessness is not only the humane thing to do, but it's also cheaper for taxpayers. One study cited by the National Low Income Housing Coalition found the public potentially saves up to $29,400 per person per year in overall costs when someone is housed, because that person ultimately experiences better health and social outcomes.
"I think that some of this is just a paradigm shift, to understand that the investment in affordable housing is an investment that wins across the board for everybody, not just the people that avail themselves of that housing," Kahl said.
