The key difference between Steps 3 and 4 is that the Community Housing Profile (Step 3) presents overall population and housing information, while the Housing Needs Assessment (Step 4) further analyzes some of those data in light of community housing standards, goals, and key addressable issues. The CHP must be written first, although it may follow the housing needs assessment (HNA) section in the final report. The HNA is then developed to discuss gaps and discrepancies related to the key problems identified in Step 2. 

FIGURE 8 presents a sample Housing Needs Assessment table of contents, with relevant housing standards parenthesized. Knowledge of local housing needs and standards, plus a critical analysis of the local housing delivery system are required to complete Step 4. Local strategists may also need to collect new or original data to document problems for which secondary data are unavailable. 

Describing (Changed) Housing Needs 

Each HNA should describe how changing demographic characteristics and lifestyles affect housing needs in that community. In short, the HNA should reflect whether and how the changing U. S. economy and society has affected housing needs in the community. For example, during the Eighties, some small towns and cities grew, while others declined in population. 

In many communities, trends of the past two decades have created a need for smaller, less expensive, and nontraditional housing alternatives. For example, household formations depend on economic and social factors, particularly the ability to pay for housing. Thus during recessionary periods, fewer new households are formed, more families double up, and grown children may return home to live. If housing is no longer affordable in the locality, many households may include subfamilies in crowded conditions or carry severe housing cost burdens (i.e., pay more than 50% of household income for housing). Declining household sizes are also affecting U. S. housing markets. Smaller households are generating additional housing demand even without the large population increases that the nation experienced during the Fifties and Sixties. A lower American birth rate, plus the increases in elderly (most of whom prefer to live independently), single-person, and single-parent households have reduced the average household size to less than three persons. Furthermore, many people in these groups need housing-service packages instead of only "bricks and mortar." 

Other factors that may need examination for their effect on housing in each community include 1) the number of first-time homebuyers and their ability to pay for new or used housing, 2) the effects of alternative mortgage instruments, "creative"/noninstitutional home financing methods, or special programs for lower-income buyers [e.g., Farmers Home Administration loans with interest credit], and 3) the availability of "less-expensive" homeownership alternatives such as condominium, limited equity housing cooperatives, or manufactured housing. How do the thermal performance of local housing, utility costs, and cost of gasoline for commuting to jobs in nearby towns affect household funds available for housing? 

The HNA must also acknowledge changes that result from federal and state legislation. For example, the 1986 federal Tax Reform Act, which removed many incentives to investment in rental property, has caused rental housing prices to rise significantly since 1987. The 1988 federal Fair Housing Amendments now require that most new multifamily housing be designed to be minimally wheelchair accessible and adaptable for persons with disabilities. State legislatures have mandated that manufactured housing that is comparable in size and shape to stick-built housing be allowed to be placed in single-family zones. 

Measuring Discrepancies: What Ought to Be vs. What Is? 

The task of a needs assessment is to evaluate identified needs (relative, perceived, or expressed) against explicit and appropriate criteria. HNA authors must define the term, "need," in a specific context, typically by using absolute or comparative criteria or standards. Need is essentially a normative concept ("what should be" vs. "what is") that invariably involves value judgements and is influenced heavily by social, political, and economic conditions. Lieder (1988) argues that because need is a social or evaluative concept, the standards must be established before determining which housing does not meet the standard. She also notes possible difficulties in evaluating housing objectively: 

1) standard-setting represents value judgements; 2) standards vary with time, place, and cultural values; and 3) the data to evaluate the standards (or measure their performance) may not be available. 

Housing professionals most frequently use the discrepancy model to look at relative need--the gap between standards and actual characteristics (needs) for some or all parts of the population. The discrepancy model involves: 1) goal setting--identifying what ought to be; 2) performance measurement--determining what is; and 3) discrepancy identification--ordering differences between what ought to be and what is (McKillip, 1987). Utilizing the data presented in the Community Housing Profile, the HNA describes local housing norms or standards (Phase 1) and identifies any discrepancies (Phases 2 and 3). 

From FIGURE 9, HNA authors may select standards that measure or assess housing physical adequacy/appropriateness, affordability, and availability. Task Force members may use the standards suggested by the HUD CHAS guidelines (highlighted in the Figure), or select others that are relevant to local housing needs and problems. The "availability and choice" standards include less direct, "macro-level" (broad) policies or applications that may result in, or affect housing choice and affordability. 

The needs assessment should include overall housing vacancy rates (excluding seasonal housing), plus separate owner-occupied and rental vacancy rates. A 4-5% overall vacancy rate is necessary to provide choice and mobility in the housing market. A higher vacancy rate will reduce demand for new units until the excess units are absorbed by the market. Too few vacancies usually force prices up, and in turn, generate demand for additional units. The added units increase the housing supply and provide more vacancies, thus enabling better housing prices for consumers (Lieder, 1988). To allow adequate consumer choice at all income levels, HUD states that the minimum vacancy rate for owner-occupied housing is 1.5%. For rental housing, HUD considers a market with less than 5% vacant units to be too "tight." 

The FIGURE 10 table can be adapted locally to illustrate affordable rents and for-sale home prices. First, obtain current low/moderate income levels for each household size from the local housing authority, HUD, or the State Census Data Center. Also borrow a "Blue Book" of mortgage loan payment tables (often available from mortgage lenders). After completing the household size and gross income columns, use a calculator and mortgage tables to complete the remainder of Figure 10. Pay close attention to the sample table key/codes that explain the column headings and bases for calculations (e.g., housing affordability "rules of thumb:" 30% for rent, 25% for monthly PITI payment; house price: from 2 to 2-1/2 times annual gross income). 

Two other housing standards that combine affordability and adequacy may interest some strategists. The "shelter poverty standards" described by Stone (1990) and Feins and Lane (1981) measure affordability on sliding scales based on income level and household size and type. The "core housing need approach," which combines affordability, adequacy, and suitability indicators into one comprehensive measure, includes only those households that could not live in a standard, physically adequate dwelling unit without paying more than a "fair" percentage of their income for shelter (Burke, Casey & Doepner, 1981). 

Housing Resource Analysis 

Without repeating the CHP descriptions, the HNA analyzes the strengths and weaknesses of the area's housing delivery system. This analysis should 1) identify specific gaps related to the community's housing goals and objectives and 2) discuss whether any lack of resources or technical assistance for community-based housing groups has weakened the institutional structure. For example, many communities lack nonprofit housing corporations with successful track records in low-rent housing development and management. A less tangible but important element is the local governing body's attitude toward housing. For example, does it support and encourage (or oppose) the development of scattered-site assisted rental housing for low income people? 

The housing resource analysis will also focus on how state and local public policies influence the cost of housing and influence whether affordable units are built, maintained, or improved. FIGURE 11 presents a checklist for analyzing how the enforcement or interpretation of local controls affects rental and sale prices of housing. Do the land use and growth controls, building and housing codes, development fees, tax policies, growth limits, and local rent control or condominium conversion laws described earlier in the CHP provide incentives--or hindrances--to affordable housing? In addition, show whether public policies have resulted in increased concentrations of racial or ethnic minorities in any neighborhood. 

Causes of housing unaffordability may differ significantly between metropolitan and nonmetro areas. For example, although housing costs may be comparatively lower in smaller communities, proportions of the household budget devoted to transportation and utility costs may be higher because of lower population densities and commuting. In small towns, higher new-housing prices may be less a factor of restrictive land use regulations than a combination of diseconomies of scale, financing constraints, and costs of public water and sewer line extensions and treatment plant construction. 

Collecting New Data to Assess Unmet Needs 

As noted earlier, the data necessary to measure or evaluate housing conditions may be unavailable. For example, the CHAS requires a description of current housing assistance needs for Very Low Income, Low Income, and Moderate Income families, based on employment statistics. If updated or complete data are unavailable, primary data collection may be required. Three useful data collection methods are windshield surveys, local housing market/cost studies, and community housing needs surveys. 

Windshield Surveys. Housing Task Force members may drive (or walk) through the community's neighborhoods to collect data for the housing needs assessment. A survey that rates structures as good, fair, or poor based on the number and degree of visible housing code violations provides a fast overview of housing conditions within the community (Shoemaker, 1987). A windshield survey may achieve a variety of other objectives (e.g., make a preliminary identification of deteriorating housing suitable for rehabilitation, assess racial concentrations, or count vacant, boarded-up units). Windshield assessments can also lay the groundwork for developing tours designed to increased awareness of local housing conditions (see process Steps 1 and 2). 

A variety of techniques for completing a windshield housing survey are shown in FIGURE 12. Housing advocates caution against using windshield survey data by itself, however. A complete evaluation of housing units for purposes of judging suitability for rehabilitation or demolition must include an interior assessment as well. No correlation may exist between a non-resident's judgement of the exterior condition and the tenant's perception of the unit's interior and quality of life. Just because it "looks like a slum...." 

Local Housing Market/Cost Surveys. A frequent public or housing industry response to claims of a desperate local housing shortage is to count the units available for sale or rent (without breaking them down by price or location). A local housing market survey may be needed to reveal affordability trends and identify neighborhoods with tight markets. For-sale and rental housing market/ cost surveys can involve newspaper advertisements, real estate listings, and/or telephone or mail surveys. 

Newspaper ("want-ads") listings' surveys usually encompass four to six weeks during a peak housing turnover period (April through June in many areas). Surveyors can record for-sale and rental prices for residential units separately by structural type, size, and location, if possible. Rental costs by unit type and size can be compared to local household type and size needs and income data to estimate any "affordability gaps." Listed rental prices may be higher than the market average because tenants who rent from family or friends often pay below-market prices. But list prices probably are accurate indicators of costs paid by households who lack the support of family and word-of-mouth networks. Finally, newly-moved-in tenants tend to pay higher rents than long-time tenants in the same building. 

To assess for-sale housing prices, utilize realtors' Multiple Listing Service (MLS) books to analyze all for-sale units or just those below a stated price level (e.g., $100,000 in the Northeast, $60,000 or less in the Midwest, etc.). With the exception of private sales, the resulting profile will reveal the location, size, and structural type of affordable housing on the market. Telephone or mail surveys of rental investors, landlords, or property managers may be necessary to obtain complete information on rental units, their costs, characteristics, and vacancies. APPENDIX E presents a sample local housing rental survey (with blank tables for presenting the results) that communities may use in developing their own data collection instruments. Further discussion of survey methodology follows the next section. 

Housing Needs Surveys. A community housing needs survey can reveal perceived or expressed needs and gather housing preference data not provided by the 1990 census. A survey also may be required to obtain data on local housing conditions--particularly in isolated or declining areas (e.g., numbers of units with physical deficiencies and without complete plumbing, adequate heating equipment, or safe water supply). Housing surveys may be needed to assess changes and trends that occur between U. S. Censuses. APPENDIX F gives a large number of sample questions about housing experience, preferences, adequacy, affordability, cost burdens, and housing assistance/service needs. The community will select the most appropriate items to construct a fairly brief survey. 

The housing needs survey should identify both housing preferences and affordability. Housing preferences, cost, and condition data are most useful when correlated with household information about income, race, age, and family composition. Because a strong preference for single-family homeownership is to be expected, questions about acceptable, but less preferred housing options should be included. Ask what forms of housing people will agree to live in when they can't obtain their first choice. What housing forms are people willing to live near? Second choices may provide insight on housing alternatives that will be acceptable to community residents. 

Survey Methodology Tips. After determining the types of data necessary to assess unmet local housing needs and identifying any gaps between needed and available data, communities must decide 1) which data are most important and feasible to collect, and 2) choose a data collection method (e.g., mail or telephone surveys, personal interviews). The most appropriate method may be dictated by the type and completeness of desired data, and cost and time involved to obtain it. 

Given the cost of survey research, a survey of the whole community or even a proportionate sample of all residents may not be feasible. Therefore, the community may consider targeting specific subgroups (e.g., potential first-time homebuyers, persons on the housing authority waiting list, landlords, etc.). If 100% of the community or each target group is not surveyed, the sampling procedure must assure that each person or property in the sample is 1) selected at random and 2) has an equal chance of being selected. Subgroups within the sample (e.g., disabled persons or single parents) should consist of at least 40-50 respondents to be large enough to meet the assumptions of various statistical procedures. 

Local strategists should try to obtain a "respectable" survey response rate of at least 50%. Thus, follow-up efforts (e.g., telephone re-calls or sending a second copy to nonrespondents a few weeks after the original mailing) are important to increase the questionnaire return rate. Sensitive income or other questions can lower the survey response rate. Assurance of confidentiality is absolute prerequisite to obtaining complete and correct data. For example, local landlords often are hesitant to divulge information about their units. 

   
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