Low-income renters are facing increasingly difficult prospects when looking for housing because more people are falling into poverty, and budget woes are cutting into the supply of government-subsidized housing, according to a Harvard study released Wednesday.

Between 2007 and 2011, the number of extremely low-income renters, or those earning 30% or less of the median income in their communities, rose by 2.5 million to 12.1 million, according the State of the Nation's Housing, a report produced annually by Harvard University's...