Housing and Society

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Insights into Housing Affordability for Rural Low-

Income Families

Jessica N. Kropczynski & Patricia H. Dyk

To cite this article: Jessica N. Kropczynski & Patricia H. Dyk (2012) Insights into Housing
Affordability for Rural Low-Income Families, Housing and Society, 39:2, 125-148, DOI:
10.1080/08882746.2012.11430603

To link to this article: https://doi.org/10.1080/08882746.2012.11430603

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 Kropczynski, Dyk 125

INSIGHTS INTO HOUSING AFFORDABILITY FOR

RURAL LOW-INCOME FAMILIES

Jessica N. Kropczynski, Patricia H. Oyk

Abstract
Many nonprofits and government entities model the standard for housing
affordability set by the United States Department of Housing and Urban
Development (HUD, which states that housing costs in excess of3096 ofgross
household income are unaffordable. Families require a minimum level ofbasic
consumption after housing costs are made which must then be purchased with
the remaining 7096 oftheir gross income. Hence, an increasing number ofstudies
have examined how these competing needs factor into the government equation
for housing affordability using national datasets. '!his study uses data from the
Rural Families Speak project, a multi-state research project focused on rural,
low-income families with children. '!he percent of income families spent on
housing is compared to their ability to fo!fill basic needs to answer the question:
Do low-income rural families that are not housing cost burdened perceive
themselves to be able to meet more basic needs than families that are housing cost
burdened according to the government standard? By incorporating measures of
perceived fo!fillment of basic needs, the understanding of affordability can be
broadened to include the challenging circumstances ofrural areas.

Keyword.: affordability, rural hOUSing, low-income.

Introduction
This study contributes to the literature on the government standard
of housing affordability as it applies to rural U.S. families by answering the
question: Do rural families with affordable housing by the government's
standard perceive themselves to be able to meet their basic needs? In a time of

Jessica N. Kropczynski (corresponding author) is a doctoral candidate in sociology, in the Department of Sociology,
University of Kentucky, Lexington, KY. Patricia H. Dyk is the Director of the Center for Leadership Development,
in the Department of Community & Leadership Development and Department of Sociology, University of Kentucky,
Lexington, KY.

HOUSING AND SOCIETY, Volume 39, Issue 2, Pages 125-148.

Copyright © 2012 Housing Education and Research Association
All rights of reproduction in any form reserved. ISSN: 0888-2746.

HOUSING AND SOCIETY, 39(2), 2012

126· Housing Affordability for Rural Low-Income Families

economic crisis, advocates for low-income families point to standards of living

which include varying basic needs while simultaneously trying to keep up with
policies that provide aid for those needs. The U.S. Department of Housing and
Urban Development (HUD) uses a common standard of affordability which
has been adopted by many government and non-profit organizations. HUD
has developed the Housing Affordability Data System (HAOS) which uses
a government standard of affordability, stating that housing is affordable if
a household is spending no more than 30% of its gross income on housing
costs (Vandenbroucke, 2007). Due to differences of geographic affordability ·
and community structure based on region, this study investigates housing
affordability within the context of the rural U.S. family.
While housing affordability is a topic familiar to researchers, the
government standard of affordability is a topic less frequently questioned.
Within the policy domain, the standard of housing affordability has only been
changed a small number of times and rarely reflects research of the time. A
historical perspective of the infrequent changes to the government standard of
housing affordability is included in the literature review. This research also builds
on previous work which questions the capacity to measure housing affordability
through standardized measurement tools by examining rural families' ability to
meet their basic needs with and without housing assistance and comparing it
to the cost burden status of the household. We begin by exploring a number of
affordability indices, describe how the most widely used definition of housing
affordability was adopted, provide an overview of theoretical applications for
housing needs, and describe challenges rural families face while making ends
meet. We then use data from the Rural Families Speak project to illustrate
difficulties in measuring rural household affordability. Finally, we delineate our
conclusions and the policy implications of this research.

Affordability Indices
A recent review of housing indices by Jewkes and Delgadillo (2010)
reported 12 housing affordability indices for both renters and homeowners, but
narrowed their review to the three most used: the HUD affordability index
for homeowners and renters, the National Low Income Housing Coalition
Affordability Index for renters, and the National Association of Realtors

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 127.

Affordability Index for homeowners. The first two are grounded in the same
rule of thumb based on the 30% ratio of gross income spent on housing. The
National Low Income Housing Coalition (2006) indicates having used a
number of measures of housing affordability, but admits that while measures
vary, they are all grounded in a "rule of thumb" that if a household spends more
than a specified percentage of its income on housing it is unaffordable.The 30%
rule of thumb remains to be the most widely specified percent of income used
by practitioners, non-profit organizations, lenders, counseling agencies, city
council members, and legislators (Jewkes & Delgadillo, 2010; Pelletiere, 2008)
and is even described as a "public policy lexicon" (Schwartz & Wilson, 2006,
p. 2). The National Association of Home Builders has developed a Housing
Opportunity Index based on median income of metropolitan statistical areas
(Torluccio & Dorakh, 2011). Due to the fact that median incomes tend to be
higher in metropolitan areas and a variety of housing options are more available,
this measure is limited in its ability to be generalizable to rural areas.
In addition to measures that are currently in practice, it is important to
note that researchers have proposed a number of new measures based on estimates
of commonly used data, many of which emphasize what a family can afford after
housing payments. Stone's shelter poverty concept (1993) considered a family to
be shelter poor if it pays too much on housing to afford the minimum adequate
level of non-household consumption. Combs, Combs and Ziebarth (1995)
used a similar measure they refer to as "housing burden" based on the poverty
threshold and concluded that if a household spends more than 30% ofits income
on housing, and less than 700Al of the poverty budget is remaining, it is in need
of housing assistance. Responding to Stone (1993), Kutty (2005) adjusted shelter
poverty bearing similarity to "housing burden," to show that near-poor renters
often fall into housing-induced poverty after paying for housing and limits their
ability to purchase basic needs. Stone (2006) later recommended an approach
that would take into consideration household size and geographic location while
recognizing that non-housing expenditures are limited by how much is left after
paying for housing. Broader recommendations for changes include Jewkes and
Delgadillo (2010) who stated that housing practitioners would benefit by utilizing
an adapted residual income approach that considers household size, geographic
location, transportation, and non-housing related expenses.

HOUSING AND SOCIETY, 39(2), 2012

128· Housing Affordability for Rural Low-Income Families

Since the HUD standard is still the most widely used of these standards,
our analysis places particular emphasis on the 30% cost burden status while
evaluating the number of needs met and other proposed measures. The next
section describes the history of the 30% standard and how it came to be the
public policy lexicon that it is today.

Origins ofthe HUD SlIIndard

Over time, thresholds of the housing cost-to-income ratio have been set
at 25%, 30%, 40%, and 50%. The following is a non-comprehensive description
of the series of transitions that have shaped this rule of thumb. The standard
of affordability has undergone many iterations dating back to the 1800s. These
percent of income measures have been criticized for not being research based
(Mimura, 2008), however these measures would be better described as based
on out-of-date research that has been augmented to meet policy needs. Ernst
Engel conducted the first housing affordability study by statistically analyzing
housing cost data in England in the 1860s and concluded that no matter their
income, families spend roughly the same percentage of income on housing
(Pelletiere, 2008). Engel's research showed that families spent roughly 14%
of income on utilities and rent across three family categories: those receiving
public assistance, those struggling but do not receive assistance, and those who
were "comfortable."
A short time later in 1875, the Labor Statistics Commissioner in
Massachusetts, Carrol Wright, translated portions of Engel's work into his own
research. Primarily, Wright focused on the statement that the ratio of gross
income spent on housing "is approximately the same, whatever the income" and
went on to disprove this statement showing that families with smaller budgets
spend nearly 26% of income on housing while those with larger budgets tended
to spend 15% of their budget on housing. Several studies through the turn of
the century found similar results concluding that few families paid more than
25% of their income on housing and most spent considerably less (Feins &
Lane 1981; Stigler, 1954). An empirical consensus emerged around this time
in the early 1900s that it was the norm for working class households to spend
roughly "a week's wages for a month's rent" (Feins & Lane, 1981, p. 9). While
the 25% rule of thumb grew in citation, Engel's Law that households of ranging

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 129

incomes spend the same ratio of income on housing was not widely accepted
(Stigler, 1954). The 25% rule of thumb was underwritten into the nation's
housing policy during the creation of the Federal Housing Administration as a
way to assess need.
While many articles indicate the laws that changed the percent of
income threshold from 25% (Hulchanski, 1995; Kutty, 2005; O'Dell, Smith,
& White, 2004), few elaborate on the historical context. Pelletiere (2008) and
Mark Shroder, the HUD Associate Deputy Assistant Secretary for Research
Evaluation and Monitoring, have provided the following context for establishing
this turn of the century research into practice. Pelletiere (2008) describes
the birth of federal low income housing policy in 1937 to have determined
housing need using the 25% rule of thumb. Later, operating and maintenance
costs rose over the next 30 years, and some tenants were paying as much as
80% of their income on housing. According to Mark Shroder (M. Shroder,
personal communication, January 28, 2008), when public housing was first
developed in the United States around the time of the Great Depression, each
local public housing authority (PHA) was responsible for raising the funds to
pay building maintenance. Over time, PHAs began raising rent to maintain
habitability, leaving tenants financially burdened and struggling to afford low-
income housing. To prevent further rent increases for tenants living in public
housing, in 1968, rent was limited to not more than 25% of a tenant's income
and mandated that the federal government would cover costs above that level.
Originally intended as a cost ceiling, this law was soon treated as a standard
rate by nearly all PHAs due to difficulties obtaining federal supplementation.
In 1981, the Reagan administration persuaded Congress to raise the rate from
25% to 30% in order to reduce the federal contribution. This legislation was
also designed to ensure that housing assistance would be better targeted toward
those most in need. Middle-class Americans at that time were falsely thought
to spend well under 30% of their income on housing. In 1983, the Housing and
Urban-Rural Recovery Act added consideration of those experiencing housing
costs that were over 50% of income and made the 30% rule applicable to all
current rental housing assistance programs.
Today, a contrived application of Engel's Law exists wherein families
with monthly housing payments (whether it be for rent or mortgage, including

HOUSING AND SOCIETY, 39(2), 2012

130· Housing Affordability for Rural Low-Income Families

utilities) totaling more than 30% of their monthly pre-tax income are considered
housing cost burdened and those totaling more than 50% are considered severely
cost burdened. This standard is not without utility, as it provides a framework
for housing discussion. The Joint Center for Housing Studies of Harvard
University (JCHS, 2005) indicated that as of 2003 nearly 70% of low wage
workers, elderly and disabled households and others in the bottom quartile were
cost burdened. Their most recent report (JCHS, 2012) further specified that
between 2007 and 2010, the number of severely cost burdened households in
the United States rose by 2.3 million, bringing the total to 10.7 million. In 1995,
Hulchanski published a review of uses of the 30% rule that indicated both cause
for alarm and utility of the standard. These uses included: comparative analysis
by researchers, eligibility standards for assistance, assessing need for additional
affordable housing, ability to pay for mortgage, and eligibility for mortgages
(Hulchanski, 1995). Hulchanski ultimately concluded that this ratio of income
spent on housing has many utilities, but using it as the definition for housing
affordability is not one of them. According to Eggers and Moumen (2008), an
ever-growing crisis has developed due to the fact that national housing costs
are reportedly increasing at three times the rate of national wages. According to
the Consumer Price Index produced by the Bureau of Labor Statistics (BLS),
this exponential increase in housing costs was a 30% increase above that of all
other items between 1985 and 2005 (Eggers & Moumen, 2008).
Along the same logic as Stone (1993,2006) and Kutty (2005), given
that 30% ofincome is to be spent on housing, it follows that a family should be
able to purchase all other basic needs with the remaining 70% of income. The
Consumer Expenditure Survey of 2010 (U.S. Department of Labor, Bureau
of Labor Statistics, 2012), reveals that the average consumer residing in an
urban area in the United States spends 12.7% of their income on food, 34.4%
on housing, 7.6% on utilities, fuels and public services, 16% on transportation,
and 6.6% on health care. According to the same survey, the average consumer
residing in a rural area in the United States spends 14% of their income on food,
29% on housing, 9% on utilities, fuels and public services, 19% on transportation,
and 8% on health care. In both urban and rural areas, as housing costs rise,
families are paying an increasing proportion of their budget on housing, leaving
a smaller cut of their budget for food and other basic needs.

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 131

HUD issued the report, Trends in Housing Costs: 1985-2005 and the
30-Percent-oJ-Income Standard, which uses data from the American Housing
Survey (AHS) to assess the current validity of the 30% standard (Eggers &
Moumen, 2008). The study examined the amount of consumption of non-
housing goods in 1985 and 2005, if households spent the 30% of gross income
on housing both years (Eggers & Moumen, 2008). The authors found that
regardless of income class, if households allocated 30% of their income to
housing, households would be able to consume more non-housing goods and
services in 2005 than in 1985 (Eggers & Moumen, 2008). A second measure
of validity was employed by utilizing the Bureau of Labor Statistics "family
budgets" as well as including basic needs and other general expenses in 1981,
updating the budget to 2005 dollars and comparing this with the income left
over after housing costs are paid. This alternative method found that families in
lower income brackets had substantially less money available for non-housing
essentials (Eggers & Moumen, 2008). This further emphasizes the need to
examine the relationship between housing cost and a family's ability to meet
other basic needs.
There are many costs competing for significant proportions of
household income. For example, increasing transportation costs were described
by the Brookings Institution (2007) to as 3% of the median household's annual
earnings in 2006. A number of economic studies from HUD (1996) have
addressed factors that affect the acquisition of housing as well as how the state
of the housing market influences overall affordability (Olsen, 1969; Varady &
Lipman, 1994). Few studies have explored how this standard is applied to rural
families that often face increased costs to meet these basic needs, which then
also increases their financial burden (Brookings Institution, 2007; Keen, 2008;
Medicare in rural areas, 2000; USDA, 2006)

TheoreticalApplications
One of the most prominent theoretical human need-based arguments
is Maslow's hierarchy of needs, as first proposed in a paper titled A Theory of
Human Motivation (Maslow, 1943). Although Maslow's hierarchy has become
outmoded over time and new theories have emerged, some organizations,
including UNICEF, have adapted Maslow's model to develop tools for

HOUSING AND SOCIETY, 39(2), 2012

132· Housing Affordability for Rural Low-Income Families

measuring poverty. UNICEF (1995) includes housing in its seven basic

physiological needs. In the United States, determining whether or not a family
is meeting their physiological needs are identified by dollar figures such as
income or consumption, but international nonprofits are employing an Unmet
Basic Needs (UBN) approach that focuses not only on food items, but also on
subsistence items (Ngwane, Yadavalli & Steffens, 2002). "Human poverty thus
looks at more than lack of income. Since income is not the sum total of human
lives, the lack of it cannot be the sum total of human deprivation" (United
Nations Development Programme, 1998, p. 25).
In working definitions of basic needs by aid organizations, shelter is
internationally recognized as a basic need (UNICEF, 1995; United Nations
Development Programme, 1998). Although it is not directly listed in Maslow's
initial work, scholars have since built upon this original work to include shelter
as one of these basic needs (Brodsky, 1977; Hartnett, 2004; Murphy, 1978).
While humans have lived in many versions of shelter from caves to castles as
a form of basic safety, in the United States, the societal standard has been set
that if a person is not able to obtain adequate housing that provides a mailing
address and other traditional features, that person will find it very difficult to
incorporate themselves into neighborhoods and employment communities
that provide human capital. This can be considered a type of social hierarchy
wherein employers often require applicants to be able to provide certain attire
and reliable transportation in addition to an address and phone number (U.S.
Department of Housing and Urban Development, n.d.).
As housing reaches unaffordable prices, housing payments may
monopolize a family's budget and interfere with the acquisition of other basic
needs. Housing is sometimes referred to as a 'fixed cost' because a family cannot
go without housing one month and gain it back the next as easily as other items
that require payments. Families often consider food to be the most flexible
expense in their budget because more options are available, such as focusing
on lower quality food items that can be purchased in greater volumes, reducing
the number of meals, utilizing food banks or 'doing without.' As housing costs
consume larger portions of their budgets, these and other strategies are used
by low-income families searching for new methods of fulfilling needs for food,
medicine, and child care.

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Oyk • 133

Affordahle Housing and Challenges for Rural Families

Analysis of rural poverty introduces notable attributes with regard to
housing including both the circumstances that exaggerate their situation as
well as the measures taken by families to keep them afloat. Rural places have
traditionally been agricultural communities, and as the nation transitioned
to a manufacturing based economy, employment became increasingly scarce
for agricultural workers. Fortunately, many were able to maintain a degree of
subsistence living and other informal means of reducing expenses and earning
wages (McGranahan, 2003).
Presently, as modem technology reaches these communities, some
informal means of expense reduction are becoming more difficult to maintain
since modem amenities (such as updated appliances) have become an ever
increasing high-cost standard. A study by the Brookings Institution (2007) that
evaluated the high cost of poverty in the United States showed that many poor
families were digging economic holes that were simply unavoidable. When
struggling to make ends meet, many families turned to paycheck advance
facilities with higher interest rates than the credit card companies that will
not approve them as customers. Rural areas do have higher expense trends
compared to urban areas in including: Medicare costs (Medicare in rural areas,
2000), higher gas prices without the availability of public transportation (Keen,
2008), and higher energy costs (USDA, 2006).
Moreover, families in rural areas may experience difficulties locating
housing that fits their affordability range (Cook, Crull, Fletcher, Hinnant-
Bernard, & Peterson, 2002). The Housing Assistance Council (HAC, 2005)
found that gentrification and decreasing housing affordability were growing
trends in rural communities due to changing community structures. As new
commuter residents move into rural communities from expanding metropolitan
areas, property taxes rise. Employment for many non-commuters becomes
limited to low paying service jobs created by new residents, exhibiting a
structural bias toward middle-class home-owners (HAC, 2005). To contribute
to literature on the differences of affordability and community structure based
on region, this study aims to investigate low-income housing within the context
of the rural U.S. family.

HOUSING AND SOCIETY, 39(2), 2012

 134 • Housing Affordability for Rural Low-Income Families

Research Question
Based on the eXIstmg literature on the government standard of
affordability and a desire to expand this research to the ability for rural low-
income families to fu1£11 basic needs, this study asks: Do low-income rural
families. that are not housing cost burdened perceive themselves to be able to
meet more basic needs (such as food, clothing, medical, dental, prescription,
credit card payments, personal care and other expenses) than families that are
housing cost burdened? Furthermore, using this comparison, we hypothesize
that: The government housing affordability standard is not a reliable indicator
of families' perceived ability to meet basic needs. Testing for a relationship
between groups is done quantitatively by comparing the percentage of gross
income spent on housing with the ability to meet the needs of food, clothing,
medical care, dental care, medicines, credit card payments, and personal care
items. Q!talitative data accompanies the quantitative analysis to add depth to
the understanding of needs affordability for rural families.

Methods
This study employs secondary data analysis of rural families using
information collected by the Rural Families Speak project, specifically utilizing
the wave one data of the longitudinal multi-state project collected between
1999 and 2001 (for further detail, see http://www.csrees.usda.gov/nealfamily/
srilfamily_sri_ruralfam.html). These data were gathered in response to 1996
Welfare Reform legislation that did not take into consideration the conditions
of rural areas. The goal of the Rural Families Speak project is to track well-
being, functioning, and family circumstances of rural, low-income families with
children over time in the context of this reform. Data in this study have been
collected from 414 rural families residing in: California, Indiana, Kentucky,
Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Nebraska, New
Hampshire, New York, Ohio, Oregon and West Virginia. Twenty-seven rural
counties within these states are included: rurality in this study was determined
using the U.S. Department of Agriculture (USDA) urban influence code of
this areal. The study consists of mothers aged 18 and older with at least one
child 12 years old or younger recruited by fliers and community agencies and

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 135

then screened for eligibility by phone or in-person screening interviews. To

be considered low-income, participants were currendy eligible for, or receiving
Food Stamps, or Women Infants and Children (WIC) Program transfers at
the time of the first interview screening (Bauer, 2005). It is currendy one of the
widest-reaching datasets of rural families in the United States of its kind.
Data were collected through three in-person interviews using a mixed
qualitative and quantitative protocol to identify common forces affecting
people in various rural communities. Mothers were surveyed about the status
of their household through an in-depth series of questions about their daily
lives and the lives of their families. Mothers were determined to be most useful
to answering questions based on the daily lives of multiple family members and
therefore, for the purposes oflarge data gathering, only mothers were considered
eligible participants. The resulting dataset contains information about many .
aspects of family life including monthly housing costs and monthly income.
For this analysis, these variables were isolated to produce the ratio of gross
income spent on housing. All data were collected consistendy with a common
protocol. After data collection, this study divided the data based on housing
cost burden status. As with many long interviews through several waves of data,
participants were given the option to pass on any particular question. Because
answers were not always provided, the total N for some variables were uneven
in this analysis. Families with insufficient information to calculate the ratio
of gross income spent on housing were excluded; the remaining sub-sample
consisted of 263 families. The sub-sample was similar in demographics to the
original sample.
The research question was analyzed through an ordered logistic
regression, frequency tables of perceived needs met, and further characterized
through statements in qualitative interviews. Table 1 shows the demographics
of the mothers in the sample used in the analysis.
The percent of income spent on housing was calculated by taking the
family's housing costs and dividing by their total income. If the percent of
total income spent on housing was equal to or less than 30%, the family was
considered not housing cost burdened. If the percent of total income spent
on housing was greater than 30%, the family was considered to be housing
cost burdened. Although housing assistance is designed to alleviate cost burden

HOUSING AND SOCIETY, 39(2), 2012

136· Housing Affordability for Rural Low-Income Families

status, participants were on various assistance programs and 33% of the cost
burdened families in the sample identified themselves as receiving housing
assistance at the time of their interview (see Table 2).

Table 1. Sub-Sample Demographics of Mothers (N = 263)

Range Mean Percent

Age (years) 18 to 57 29
Number of children 1 to 10 2.3
Annual gross household income 115,522
Monthly housing costs .254
Housing cost burdened 40%
Received housing assistance 21%
White! Non-Hispanic 65%
Hispanic 22%
African American 9%
Native American 1%
Asian 0%

Table 2. Crosswise Comparison of Presence of Housing Assistance

with Cost Burdened Status

Not cost burdened Cost burdened Total

No housing assistance 149 (76%) 45(67%) 194
Received housing assistance 47 (24%) 22 (33%) 69
Total 86 (100%) 67 (100%) 263

The perceived ability to make ends meet was evaluated through by

following survey question:
In the past year, has there been a time when you had a hard time mailing
ends meet or payingfor necessities' What did you have trouble paying/or'
Food' Clothing' Healtheare' Credit payments' Personal care or non-jood
items'

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 137

The ratio of gross income spent on housing was compared to the yes/no
responses of families' ability to pay for necessities (food, clothing, medical
care, dental care, medicines, credit payments, personal care items and other).
The housing cost variable included utility costs and actual dollar amounts
paid for housing (after any subsidies or assistance has been applied). Total
income included the following: self and partner wages, tips, commissions and
overtime, Social Security Disability, social security retirement! pensions, SSI
(Supplemental Security Income), TANF (Temporary Assistance for Needy
Families), unemployment compensation, worker's disability compensation,
Veteran's benefits, child or spousal support, foster child assistance, children's
wages, food stamps, regular gifts from family/friends, educational loans/grants
and other miscellaneous income.
The percent of gross income spent on housing allowed us to categorize
each participant. On average, there was no significant difference in the ability
to meet basic needs between families that were cost burdened and families
that were not cost burdened based on a t-test. The ratio itself was compared to
each of the perceived needs met through an ordered logistic regression. In an
effort to obtain further descriptive information about these rural low-income
families, statements about their individual situations were highlighted from the
qualitative portion of the interviews and the descriptive statistics were used to
further differentiate individual need variables. Aggregates of all need variables
were used to compare the total number of perceived needs met to the cost
burdened status as well to help identify ranges of needs met. The cost burdened
status took into account whether families received housing assistance; further
examination of the ability to meet needs was done by not only categorizing
families by cost burdened status, but also whether or not the family received
housing assistance.

Results
In-depth interviews provided both qualitative and quantitative
information. Mothers gave accounts of their families' struggles to meet basic
needs. Even with various forms of financial assistance, many cost burdened
families were still not able to meet basic needs. These cost burdened families
did not report high standards of economic success; most stated relatively simple

HOUSING AND SOCIETY, 39(2), 2012

138· Housing Affordability for Rural Low-Income Families

definitions of the term necessities: "My kids' clothes, our food ifwe need extra food,
and shampoos, and things like that." When interviewed, these cost burdened
families did not describe eillborate or frivolous spending habits. This indicates
that their perception of needs was not one of excess, but a desire to purchase basic
items. When asked "If you got 20 dollars tomorrow, what would you do with it?"
one mother responded, "Buy something I needed. Like soap or something."
A comparison of the group of cost burdened households to the group
of not cost burdened households is shown in Table 3. The cost burdened group
had larger monthly housing costs and lower monthly incomes than those of
the group not cost burdened. This is what directly contributed to the greatly
differing averages of gross income spent on housing. For this analysis, it is
important to start with the understanding that these two groups are different
in their income and housing costs.

Table 3. Weighted Means of the Continuous Variables

Cost burden status

Not cost burdened Cost burdened

Variables (n =63) (n =200)
Monthly housing cost (in dollars) 215.22 436.35
(13.914) (22.566)
Monthly household income (in dollars) 1495.92 959.74
(58.155) (67.303)
Percent of income spent on housing 0.137 0.556
(0.006) (0.470)

Note: Numbers in parentheses are standard errors of the means

The ratio of income spent on housing, is a continuous variable, but it

can also be examined as a dichotomous variable (as shown in Tables 4 and 5),
wherein ratios greater than or equal to 30% are categorized as cost burdened and
ratios less than 30% are categorized as not cost burdened. A regression analysis
was used to examine this ratio ofincome as a continuous dependent variable. The
results showed no relationship between the ratio ofincome spent on housing and
the ability to meet overall basic needs. There was also no relationship between
ratio ofincome spent on housing and any other demographic variables. Previous

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 139

research indicated that from a policy standpoint, "it is important to understand

which households cannot pay for non-housing needs after they pay for housing
because they are likely to be in a more precarious position than those that have
high cost burdens but can still pay for minimal non-housing consumption"
(Kutty, 2005, p. 116). Further examination of the ability of these families to
meet needs was done by comparing the same perceived needs with whether the
family received housing assistance (Table 4). Again, there was little disparity
between the families that received housing assistance and those that did not.
This suggests that assistance given to families with the intention of making
housing affordable and increasing the ability to meet needs did not necessarily
lead to a difference in the perceived ability to meet needs. The absence of any
significant variance between the two groups' perceptions of met needs calls into
question the effectiveness of the level of assistance these families were given,
since recipients perceived themselves to be no better off in terms of basic needs
than non-recipients. This analysis suggests that the many organizations using
some variation of the government standard of affordability when calculating
housing assistance allowances may need to reconsider this equation if wishing
to have a greater impact on rural recipients' overall economic well-being.

Table 4. Count of Perceived Needs Met by Cost Burdened Status and

Housing Assistance

Not-cost No housing Received housing

burdened Cost burdened assistance assistance
(n 151)
D (n =104) (n ~ 205) (n . 50)
Needs met n % n % N % n %
0 33 21 17 16 47 30 3 6
1 29 19 14 13 30 14 13 26
2 24 16 14 13 28 13 10 20
3 13 8 25 24 29 14 9 18
4 18 12 11 10 23 11 6 12
5 13 8 11 10 18 9 6 12
6 11 7 8 7 18 9 1 2
7 5 3 1 1 5 2 1 2
8 5 3 3 3 7 3 1 2
Mean number
of needs met 2.3 3.4 4.1 2.9

HOUSING AND SOCIETY, 39(2), 2012

140· Housing Affordability for Rural Low-Income Families

Yet another way that families were similar was in not only the number
of needs met, but in the perceived ability to meet each individual need (Table
5). The largest discrepancy between the two groups was in their ability to meet
medical care needs, which was a difference of 7%, with cost burdened families
perceiving an improved ability to meet this need. This discrepancy may be due
to increased eligibility for medical assistance for low-income families; another
explanation is that this was a need that cost burdened families leveraged as a
payment priority among other needs. The second largest discrepancy between
these two groups was the non-cost burdened families' perceived ability to meet
clothing needs; it was five percentage points higher than their cost burdened
counterparts. Clothing needs were perceived to be met more than any of the
other needs discussed, as many families were able to utilize second-hand clothes
from child to child or find clothing donation centers in their area. Still, only
55% of non-cost burdened families and 50% of cost burdened families perceived
themselves to be able to meet this need, indicating that, overall, these low-
income rural families perceived themselves capable of meeting very few needs.

Table 5. Categories of Perceived Needs Met by Cost Burdened Status

and Housing Assistance

Needs perceived to be met (percentage)

Medical Dental Credit Personal
Food Clothing care care Medicine card care Other
Non-cost
burdened 43% 55% 26% 25% 33% 35% 30% 37%

Cost
burdened 41% 50% 33% 25% 31% 36% 34% 37%

No housing
assistance 42% 45% 31% 28% 33% 31% 30% 32%

Received housing
assistance 35% 48% 22% 22% 29% 38% 33% 41%

When comparing each of the individual needs once more but separating
families by receivership of housing assistance, more variation occurred among
families than in any of the above comparisons (Table 5). Interestingly, the
perceived ability to meet the needs of food, medical care, dental care and
medicines were all higher among families not receiving housing assistance.

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Dyk • 141

Clothing, credit card payments, personal care and other needs were perceived
to be met more often by families receiving housing assistance. These differences
could be, in part, due to the nature of the need categories. Food and medical
needs are generally items of higher priority than those of clothing {which,
as discussed, may be slighdy more accessible}, credit card, personal care and
other needs, which may sometimes be overlooked in times of severe difficulty.
This particular sample did not corroborate Kutty's {2006} claim that housing-
induced poverty (which is based on the ability to afford a basket of non-housing
goods) is less likely if receiving housing assistance.
When looking at the cost burdened status in comparison to the number
of aggregated perceived needs met that were described in Table 4, the majority of
all families, both cost burdened {n = 104} and non-cost burdened {n =151}, met
between zero and four of the basic needs in question. Very few families met all
eight of the needs. There was litde difference between the two groups in terms of
their ability to meet basic needs based on cost burden status. In a t-test, families
that were not housing cost burdened did not meet significandy more needs
{M = 2.88, SD = 4.71} than those families that were housing cost burdened
{M = 2.56, SD = 3.77}, 1(95} = 1.07, P = .285. This indicates that these
particular low-income families living in rural areas felt no less 'burdened'despite
their technically non-cost burdened status. For these families, the government
standard does lime to measure true affordability. Further, an ordered logistic
regression did not indicate any statistically significant correlations between cost
burdened status and the ability to meet basic needs. One might expect families
with relatively higher income and lower monthly housing costs {as indicated
in Table 3} to have a statistically significant ability to meet more needs than
their counterparts with higher housing costs and lower incomes, however, an
ordered logistic regression and I-test showed no relationship between the
variables. Counts with simple percentages were found to be the best way to
further describe nuances to these variables.

Conclusions
The families in this study that were not housing cost burdened were
not more likely to perceive the ability to meet more needs than the families
that were housing cost burdened; thus, our hypothesis is in line with the results.

HOUSING AND SOCIETY, 39(2), 2012

 142 • Housing Affordability for Rural Low-Income Families

This study supports the concept that the government standard of housing
affordability is inadequate and that the definition of affordability needs to be
reconstructed to include the ability to meet the basic needs of families. This
is consistent with the findings published in the aforementioned HUD study
(Eggers & Moumen, 2008), stating that after spending 30% of income on
housing, the remaining 70% of these families' income does not appear to be
enough to meet basic needs. However, when comparing income alone to the
cost of needs in this study, some families would not be able to meet basic needs
even if they had no housing costs at all. It should also be noted that, even if70%
of their income was sufficient to meet other basic needs, 30% of a low-income
budget is sometimes still not enough to cover housing costs and in most cases .
would not be likely to secure safe, habitable housing. In a similar study, Mimura
(2008) found that poverty status may be a better explanation of economic
hardships than housing cost burden, which supports the idea of income-range
based policies rather than percent of income. As Maslow suggests, because
these families are not able to meet the basic need of housing, the families are
not able to move up the hierarchy to meet other needs that they expressed
interest in achieving such as stable employment, owning their own home, or
completing their education.
A number of alternative measures have been proposed (e.g., Combs,
Combs, & Ziebarth, 1995; Jewkes & Delgadillo, 2010; Kutty, 2005; Stone,
1993; Stone 2006), however, reforms to make the standard more precise and
based on explicit norms of affordability have never gained momentum. The
rule of thumb arose out of a series of transitions prompted by controversy
surrounding the amount families would pay for rent in federally assisted
housing rather than current research-based methods of household finances
(Mimura, 2008). The scientific basis for the current affordability standards
are empirical studies from family budgets from the late 19th and early 20th
centuries. There have been obvious household changes to family budgets since
the percent of income standard was set. In their much-cited article, Linneman
and Megbolugbe (1992) point to transitions through the years that have driven
up the cost of housing. A doubling of median family incomes in the 1950s and
1960s drove up the quality of U.S. homes, followed by availability of consumer
credit and changing tastes for housing amenities (Linneman & Megbolugbe,

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Oyk • 143

1992). Prices of utilities have also increased dramatically over the last century
and as these costs have increased, home builders have placed emphasis on
building materials to increase energy efficiency at increased housing costs.
To ground this standard in scientific research, competing percentages
of household spending will need to be taken into consideration on a regular
basis which would force the standard to be in constant flux. Another problem
in measurements is the growing availability of consumer and housing related
credit, particularly to lower income consumers and the subsequent growing
debt levels among U.S. households. Linneman and Megbolugbe (1992) were
ahead of their time when they pointed to an affordability paradox wherein "the
prospect of future price appreciation increases the investment attractiveness of
purchasing a home even as it reduces affordability" (p. 374). Other countries
have adapted measurements to include basic needs, for example the Australian
Government's National Housing Strategy defines affordability as "the notion
of reasonable housing costs in relation to income; that is, housing costs that
leave households with sufficient income to meet other basic needs such as food,
clothing, transport, medical care and education" (Berry & Hall, 2001, p. 50).
Housing need is commonly treated as having three components of
which housing affordability is only one (O'Dell, Smith, & White, 2004). Only
housing affordability was truly addressed in this analysis, however, this is not to
minimize the importance of the other two housing needs: housing condition
and overcrowding. The American Housing Survey gives some consideration to
a housing quality index; however, it does not cover all areas and is more useful
to large metropolitan areas. Future studies should consider datasets that contain
information on the breadth of housing needs for a more robust analysis of the
special conditions of rural areas which typically have a different housing makeup
from their urban counterparts. Many rural areas do not have the economic
development structure to continue producing new homes or rental homes. This
lack of new development causes many homes to go into disrepair. With these
structurally different types of housing problems, many low-income families in
rural areas are not seeking the same types of government-assisted housing.
Currently, similar debates are being held regarding other forms of
assistance, with politicians discussing policies that will designate affordability
of various needs as a percentage of income. In order for these debates to be truly

HOUSING AND SOCIETY, 39(2), 2012

 144· Housing Affordability for Rural Low-Income Families

comprehensive, policy makers must critically assess to which populations these

percent-of-income policies are meaningful before continuing in this direction.
Low-income housing advocates look for actual dollar amounts, rather than
a ratio, to associate with housing, arguing that "[t]he insistence upon setting
rent as a percentage of income is a curious, brilliant illumination of what one
might call Congress' middle-class bias. Rent-income ratios are meaningful for
the middle-class but not for the poor, who often cannot afford to spend any
portion of their income on rent" (Roisman, 1971, p. 692). As this study shows,
current percent-of-income housing standards do not appear to be adequate
measures of affordability for these rural low-income families, indicating that
similar basic need standards may be equally insufficient for such families.
The government standard of affordability is an example of the
intrinsic interest in cross-national and urban scales that much of the literature
on inequality has been situated (Lobao, Hooks, & Tickamyer, 2007). These
authors note that while demography and rural sociology traditionally consider
the context of space, most other disciplines are lacking the appropriate
background to frame such questions. They are concerned that inequalities of
space and place have been left in a different field than studies of inequalities.
This is an important point to make not only to researchers in these fields but
to the policy makers and national organizations that serve rural communities.
With a focus on public sociology, some grantors have incorporated the need
to translate research into more public forms such as policy briefs or pamphlets
that can be distributed to community organizations. It is understandable that
as Lobao et al. (2007) has pointed out, there is litde adequate research being
produced in this area, therefore it becomes increasingly important to increase
the accessibility of this information.
Ultimately, the ways that rural low-income families make ends meet
may be significandy different than those incorporated into a ratio of income
spent on housing. When looking at percentages alone, there is a counter-
intuitive relationship between the ability to meet needs and housing cost
burden status. This is an indication that rural communities do not statistically
fit the same equations of affordability that are used to govern federal funding.
Further research is recommended in this area to prescribe policies specifically
targeting rural poverty. A limitation of this study was depending on a dataset

HOUSING AND SOCIETY, 39(2), 2012

 Kropczynski, Oyk • 145

that did not exclusively target the topic of housing or perceived needs met.
Primary data from survey, in-depth interview, or focus group questions specific
to the hypothesis that cost burden status does not aid in the perceived ability to
meet needs may help explain these results in future studies.
Another limitation of this study is the subjective determination of the
ability to meet needs. A study with less subjectivity might use an estimated dollar
amount necessary to meet each of these needs per family member in order to
determine if the ability to meet these needs is allowable by the household budget.
Alternately, it might include observation offamilies' consumption of needs to gain
understand of contributions by welfare, nonprofit organizations, and information
networks in addition to direct spending ofincome on meeting basic needs. These
study designs would still be limited by the subjectivity of the researcher, but
would allow for some measurement consistency across cases. These studies
might be amiss to disregard the perception of the participant themselves and
their ability to meet basic needs. While this study is limited by the participants'
perceptions, there is also a great deal to learn from these perceptions.

Endnotes
1 Urban Influence Codes are a 12-part county classification scheme that
distinguishes metropolitan counties by size and nonmetropolitan counties by
proximity to metro and micro areas. More information can be found on the U.S.
Department of Agriculture Website: http://www.ers.usda.gov/data-productsl
urban-inHuence-codes.aspx

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