Housing Needs Assessment

What Is a Housing Needs Assessment?

A housing needs assessment is a study of the housing situation in an entire community. It asks how many households cannot afford their homes and which kinds of homes are in short supply. It also projects how many more homes will be needed as the population and economy change. The result is usually a report with data tables, maps, and recommendations for local officials.

Governments use needs assessments to set housing goals, decide where to spend limited funds, support grant applications, and update zoning and land-use plans. Developers and employers also use them to understand local demand.

How a Housing Needs Assessment Works

Assessments typically combine several types of evidence:

• Demographics and jobs. Population growth, household size, age, and the wages of local industries.
• Housing supply. The number, type, age, and cost of existing homes, plus recent construction.
• Affordability gaps. How many households in each income band are cost-burdened (paying more than 30% of income for housing) or severely cost-burdened (more than 50%).
• Projections. Estimates of how many homes, at what price points, will be needed over the next five to ten years.
• Stakeholder input. Interviews and surveys with residents, employers, developers, and service providers.

Communities that receive HUD formula grants must include a housing needs assessment in their consolidated plan. Federal rules require them to estimate needs for extremely low-, low-, moderate-, and middle-income families. They must also summarize cost burden, overcrowding, and substandard conditions, and cover homelessness. Much of the underlying data comes from HUD’s CHAS data, custom Census tabulations HUD receives each year. As of October 2026, the most recent set was based on 2018–2022 American Community Survey estimates. HUD released it on December 23, 2025.

Example

The Delaware State Housing Authority publishes a statewide assessment every several years; earlier editions covered 2008–2012 and 2015–2020. Its 2023 assessment, prepared by Root Policy Research and covering 2023–2030, found that 50% of Delaware renters and 20% of homeowners paid more than 30% of their income for housing. It also estimated that about 6,760 more homes would have been needed from 2010 to 2020 to keep up with household growth. Results varied by region. Construction fell short of household growth in western Sussex County and in Kent County. It outpaced household growth in New Castle County and eastern Sussex County.

Why It Matters for Workforce Housing

Needs assessments can reveal shortages among middle-income households, such as teachers, nurses, and service workers, whose earnings can exceed the income limits of federal rental programs. They give local governments and employers evidence to justify workforce housing programs and the income bands those programs serve.