What Is “Affordable” Housing?

Week 7 Affordable Accelerator Impact Hub Austin

The government says housing is “affordable” if a family spends no more than 30% of their income to live there. This threshold is called “affordable rent burden.” But 30% of $1 million is very different from 30% of $20,000.

Housing is a person’s single most important expense. While a roof over someone’s head is something too often taken for granted, a roof and four walls imbue people with a sense of stability, one that allows them to turn their attention to other priorities, like finding a better job or helping their kids with school. And so, when housing is uncertain, or when so much of a paycheck goes to rent that it.

And so, when housing is uncertain, or when so much of a paycheck goes to rent that it keeps someone from basic necessities, it’s impossible to think about anything else. n this, “affordable housing,” as a concept, is frequently misunderstood, shrouded in many of the same misconceptions as other social policies aimed at helping low-income and vulnerable populations. The myth of the welfare queen pervades, as we continue to categorize poor people as “deserving” or “undeserving” of aid and project our own assumptions on people who receive aid, thinking of them as lazy or crooked.

So let’s clear up some of those myths.

First and foremost: “Affordable housing” doesn’t mean, necessarily, the projects. It actually just refers to the fact that you’re spending less than 30 percent of your post-tax income on housing. The Department of Housing and Urban Development indicates that families paying more than 30 percent are considered “cost burdened, and may have difficulty affording necessities such as food, clothing, transportation, and medical care.” HUD estimates that 12 million households (renting and owning) pay more than 50 percent of their take-home income on housing each year. And to be clear, in no state can a full-time worker making the federal minimum wage ($7.25 an hour) afford a two-bedroom apartment at fair market rent. Plus, there’s a lot of competition for places with lower rents, as Millennials put off buying homes and aging adults sell their homes to move into the rental market.

Yet this still doesn’t get at the image people typically conjure when they think about low-income or affordable housing: the projects. Indeed, you might be imagining those high-rise public housing developments — subsidized apartment buildings where residents pay below-market rent. These were built in the mid- to late-20th century with HUD funds and authorization. But the once-preferred method of increasing public housing, “the projects,” as they came to be known, soon created a number of social issues. As time went on, insufficient funding and poor management.

So what really is “affordable housing”?

What’s affordable? — Tenant’s perspective

• Pay less / lower rent

• Get more with what you pay/ more services and better facilities

• Get more incomes / housing and work opportunities

What’s affordable? — Landlord´s perspective

• Social housing

• Better financing /production support

• Costs: Land, Construction /materials, work, Process and Maintenance costs

An idea to consider (that works in places around the world):

• Scattered housing bought form owner-occupied housing companies

• Real estate: normal rental housing

• Supported and service housing

• Support and services are arranged by local social services or NGOs