This is the second in a two-part series on the Kansas City region's housing shortage. Part one measured how many homes are missing and how that shortage falls on different age groups for both owners and renters. Part two examines the mismatch between renters' incomes and the affordable rental units available to them, along with the role higher-income households occupying lower-cost units play in this mismatch.

What is considered affordable?

Housing cost burden is widely used to determine if a household is living somewhere they can afford— where household expenses (e.g. rent, utilities) do not exceed 30% of their gross income. If a household spends more than 30% of its income on these housing costs, they are considered cost burdened. 

The U.S. Department of Housing and Urban Development (HUD) compares a household’s income with the respective AMI, adjusted for household size, to determine maximum housing costs that are affordable at different income levels. HUD categorizes these into four different income brackets: extremely low income (ELI), very low income (VLI), low income (LI) and moderate income and above (MI+).  

In this analysis, we calculated the household income associated with these categories using HUD’s 2018–2022 Comprehensive Housing Affordability Strategy (CHAS) estimates to show whether rental units are affordable for households in these income tiers

Table
Source: HUD Income Limits table 2022 and author’s calculations for monthly rent and utilities as 30% of AMI for a two-person hou
Income band Share of AMI (approx. annual income) for a two-person household Approx. rent and utilities
Extremely low income (ELI) Under 30% (under $23,250) Under $581
Very low income (VLI) 30% to 50% (up to $38,750) $582 to $969
Low income (LI) 50% to 80% (up to $62,000) $970 to $1,550
Moderate income and above (MI+) Above 80% (over $62,000) $1,551 and up

The region’s affordable housing gap is nearing its all-time high. The shortage of affordable rentals peaked after the Great Recession and declined as the economy recovered. However, the COVID-19 pandemic in 2020 reversed this trend, resulting in an increasing shortage of affordable housing for households with incomes below 80% of AMI.

The chart below shows this reversal beginning in 2018. The dates on the chart reflect the midpoint of each CHAS five-year data collection period. The 2018 estimate includes data from 2016 to 2020, which captures the first year of the pandemic.

While ELI renters continue to face the largest shortage, recent increases have occurred among VLI and LI households. The shortage for ELI renters remained relatively unchanged at 43,800 units. For VLI renters ($23,250 to $38,750), the gap grew 18% to 20,684 units. Among LI households ($38,750 to $62,000), the gap nearly doubled, increasing 82% from 2,510 to 4,569 units since the 2015-2019 CHAS release.

What happens to the affordable units that do exist?

Beyond the shortage of units for each income tier, many of the affordable units that do exist aren’t occupied by renters who need them most. In the lowest-cost units—those renting for about $581 or less—42% are occupied by households with incomes above that tier. Among units affordable to VLI households, that share rises to 51%.

MARC’s article about assessing the affordable housing gap described this mismatch as crowding out: higher-income households living in housing that lower-income households could otherwise afford, leaving fewer of these units available. As a result, lower-income households absorb higher costs by renting above their means in units priced above their income tier, disproportionately impacting the lowest-income renters. CHAS data show 69% of ELI renters live in units priced above their income tier, compared with 43% of VLI households and 7% of LI households.

These patterns highlight the important difference between a home being affordable in theory and being available to the household that needs it when they need it. For housing to be attainable, it must, at minimum, both be affordably priced and available to rent. 

Excluding units occupied by higher-income households, none of the lower-income groups (ELI, VLI, LI) can access attainable rentals for every household. As the chart below shows, the share of attainable rentals has declined across all three lower-income groups between 2015–2019 and 2018–2022. 

With fewer options than before, only about a third of ELI households and roughly two-fifths of VLI and LI households can find attainable housing. MI+ households remain at 100% because they can afford units priced within their income tier without having to spend 30% of their income on rent, giving them a wider range of options across the rental market.

Lower-cost rentals are disappearing

The CHAS data above looks at affordability from the perspective of a household’s income constraints; the American Community Survey (ACS) comparison below examines the supply of these rentals alongside their cost.

Recent 2020–2024 ACS estimates show that total rentals (306,341 units) exceed renter households (290,864) in the region. However, the overall supply is getting more expensive, which adds to the affordability constraints lower income households already face. Between 2015–2019 and 2020–2024, rentals at $649 or less fell nearly 50%, closely followed by units between $650 to $999—the largest share of affordable units lost. Over the same period, units priced at $1,500 or more nearly tripled.

The shift is consistent with the widening shortage among renters above the lowest income tier. As lower-cost units disappear, VLI and LI households have fewer places to rent within their budgets and face increasing competition for the affordable stock that remains.

Who's paying more than they can afford? 

The loss of rentals at lower price points matters for workers whose wages place market-rate housing increasingly out of reach. 

To show what this looks like for renters in different occupations, the examples below use median wages from the 2018–2022 American Community Survey Public Use Microdata Sample (PUMS) alongside CHAS income thresholds to measure what a two-person household can afford to pay in rent based on its household income. 

As not every household has two earners, these examples assume a household is supported by one worker's wage, such as a single parent. The table below shows where a household matched to each income band might fall. A preschool teacher earning $25,261, for instance, would fall into the VLI tier under this scenario. 

Table
HUD income band Income range Affordable rent Example occupations
Extremely Low Income (ELI) Under $23,250/year Under $581/mo Home health aides ($21,618), Cooks ($19,673), Childcare workers ($14,160)
Very Low Income (VLI) $23,250 to $38,750/year $582–$969/mo Bookkeeping clerks ($38,000), Customer service reps ($28,705), Preschool/K teachers ($25,261)
Low Income (LI) $38,750 to $62,000/year $970–$1,550/mo Firefighters ($56,657), Elementary teachers ($49,000), Electricians ($45,398)
Moderate Income & Above (MI+) $62,000+/year $1,551+/mo Software developers ($103,340), Physical therapists ($74,000), Registered nurses ($65,000)

Source: U.S. Census Bureau, American Community Survey 2018–2022 five-year Public Use Microdata Sample (PUMS). Median wages are for renter workers by occupation in Kansas City, MO-KS MSA. Affordable monthly rent is calculated as 30% of income for a two-person household. Occupations are grouped by the income band corresponding to the median renter wage and do not factor in actual household size. For workers in these occupations with more than one dependent or live alone, these wages may under- or overestimate affordable rent. 

These figures are a way to illustrate the affordability problem, not a measure of the income of every household in these occupations. A second earner would often lift a household into a higher income tier, while having dependents or living alone may reduce what that household can reasonably spend on rent.  

What this means

Broader housing production may ease pressure across the market, but the analysis shows that the number, price and availability of units all matter.  

These findings point to two regional needs: 

  1. Build more housing, especially units within the means of renters at the lowest income levels
  2. Preserve the affordable housing that exists. 

While expanded housing production at all price points may ease market pressures, targeted investments and interventions are necessary to produce the right units at the right price points regionally for residents to find a home they can afford at their given income level. 

Regional planning and preservation programs can help retain lower-cost housing while new supply is built. The 21st Century Road to Housing Act includes provisions to support affordable housing construction, streamline small projects, fund regional housing planning and preserve existing affordable housing. 

For the MARC region, these programs help use existing space and housing stock better while new construction catches up with demand. Without coordinated action, the region may continue to see less affordable housing for the poorest renters and fewer options for working families that may not qualify for subsidies but struggle to cope with rising rents.  

Methodology

The analysis uses HUD CHAS Table 15C to measure the number of renter households in each income category whose housing costs exceed 30% of income. The headline comparison uses the release MARC published in 2023 (2015-19 vintage) with the newest release (2018-22). CHAS income tiers are defined as shares of AMI (ELI <30%, VLI 30-50%, LI 50-80%, MI+ >80%), so the dollar cutoffs and corresponding rent bands rise with each vintage even though the income share is unchanged. This is why the 2018-22 limits (ELI < $23,250; VLI to $38,750; LI to $62,000) differ from the earlier release.