5 Facts About Affordable Rental Housing That Matter for Broadband

Many residents of federally assisted multifamily—also called affordable rental—housing lack access to broadband service and face persistent challenges to getting a connection. But new federal funding presents opportunities to help families in affordable housing gain high-speed internet and all the benefits that come with it.

The Infrastructure Investment and Jobs Act of 2021 (IIJA) included billions of dollars to help bring broadband service to more Americans, including those in affordable rental housing. As states gear up to put these funds to work, they and their partners need to better understand the federally assisted housing stock and the barriers these properties encounter when trying to get connected. Here are five key things state leaders, internet service providers, and other stakeholders need to know about federally assisted multifamily housing and the people who live in it.

1. “Federally assisted housing” encompasses many property types, multiple agencies

When people think of federally assisted housing, they often think of public housing operated by the Department of Housing and Urban Development (HUD). But federally assisted multifamily housing is an umbrella term that includes all housing in the nation—whether owned and managed by a public, private, or nonprofit landlord—that receives funding through federal programs designed to produce, rehabilitate, or administer rental properties for low-income households. These programs are housed in various federal agencies and serve different populations around the country.

HUD operates several major programs designed to facilitate access to affordable rental housing:

• Federal public housing is HUD-owned housing stock that is operated by public housing agencies (PHAs) at the city or county level and provides housing for very low- and extremely low-income households. As of June 2021, HUD owned more than 950,000 public housing units housing over 1.8 million people across all 50 states and some territories.
• Project-based rental assistance provides subsidized apartment housing through contracts with nongovernment building owners and includes programs for older Americans (through the Section 202 program) and people with disabilities (through the Section 811 program). Property owners may be public, private, or nonprofit entities. More than 2 million people live in the nation’s 1.2 million project-based rental units.
• Housing choice vouchers help families secure their own housing on the private rental market via subsidies paid by each recipient’s local PHA directly to landlords for a portion of the rent, with tenants responsible for the balance of the rent amount. HUD and a network of about 2,170 PHAs operate the program, which provides housing to more than 5 million people in 2.3 million households.

The IRS administers Low-Income Housing Tax Credits (LIHTC), which are allocated to states annually and lower developers’ tax obligations for projects that produce privately owned affordable rental housing. Between 1987 and 2020, the LIHTC program supported the building of 3.44 million housing units.

The U.S. Department of Agriculture’s Rural Housing Service supports the creation and affordability of rural rental housing throughthree programs:

• Section 515 offers loans for rural rental and cooperative housing.
• Section 538 guarantees loans made for affordable rural rental housing development.
• Section 521 provides rental assistance to residents of Section 515 units.

The USDA’s rural rental portfolio currently includes more than 14,000 properties nationwide.

2. Assistance-eligible households are disproportionately likely to have no or slow internet service

HUD determines housing eligibility by setting income limits that vary by metropolitan area. The department defines low income as households earning up to 80% of median family income for the area, very low income is up to 50% of median family income, and extremely low income is up to 30%. Several other federal housing programs rely on HUD’s income limits to set their own program eligibility.

Across programs, most households in federally subsidized multifamily housing are very or extremely low income. But even many higher but still low-income households across the country lack broadband service: Nationwide, 43% of adults with annual household incomes under $30,000 do not have high-speed internet at home.

Further, many affordable housing residents are older or disabled, two groups that are less likely than the national population on average to have or use broadband. Only 64% of adults over 65 have a home broadband connection, compared with 77% of all adults, and Americans with disabilities are less likely to own a computer or smartphone and more likely to say they never go online than those without disabilities.

3. The age of the federally assisted housing stock hinders connectivity

Half of public housing units were built before 1975, only 17% have undergone additional construction since 1997, and many have no or outdated wiring, all of which can make it more difficult or expensive to install high-speed connections now.

Since 2017, HUD has required that broadband be installed in all new construction and substantial rehabilitations, which, although an important step, affects only a small fraction of the total federally assisted housing stock. Certain programs, such as the Rental Assistance Demonstration, which allows PHAs to leverage debt and equity to rehabilitate public housing developments, present an opportunity to wire a significant number of units.

Additionally, HUD has a massive backlog—estimated at $70 billion—of deferred maintenance and capital expenditures needed just to keep units habitable, and with limited funding available, these repairs necessarily take priority over broadband installation.

4. Outdated guidance, low funding, complex enrollment limit programs’ impact

HUD’s utility allowance—which is part of the total resident payment—does not include high-speed internet. Thus, households living in federally assisted housing must pay the full cost of a broadband subscription in addition to their housing and utility payments, which for most very and extremely low-income residents is cost-prohibitive.

Federal subsidies such as the Affordable Connectivity Program and Lifeline that provide money directly to households to pay for broadband can help, but residents report that these programs can be difficult to access. And although HUD’s ConnectHomeUSA program promotes increased connectivity in federally assisted housing, it does not provide any funding assistance for property owners or residents.

To begin to address this coverage gap, in January 2021 HUD issued guidance allowing PHAs to use funds from its Capital Fund Program for broadband infrastructure and equipment and from its Operating Fund Program to provide internet to residents. However, given that existing HUD funding levels are insufficient to keep up with basic maintenance needs, the department is unlikely to be able to dedicate adequate resources for significant broadband access improvements.

5. Federal funding can bridge broadband gaps

The Broadband Equity, Access, and Deployment program and Digital Equity Act programs in the IIJA offer funding for infrastructure and adoption uses. And although this funding is an important step toward closing the digital divide, it does not address the challenge of paying for service over the long term or the need to provide affordable connections for the thousands of low-income households not living in federally assisted housing, including the 3 in 4 eligible households that do not receive federal housing assistance.

As states begin planning to deploy these federal dollars, they will need to engage with affordable housing providers—such as HUD field offices, PHAs, ConnectHomeUSA sites, nonprofit housing providers, and the USDA—to learn about the specific challenges affordable properties face as well as any creative strategies providers have used to get residents connected. By partnering with affordable housing experts and stakeholders, states can begin to identify the broader solutions needed to provide broadband to the majority of housing-cost-burdened families across the country.

Anna Read is a senior officer and Kelly Wert is an associate with The Pew Charitable Trusts’ broadband access initiative.