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What is Affordable Housing?



Affordable housing is defined as housing in which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities so that the household can reasonably live without poverty or financial stress. The term affordable can mean different things to different people – so what do we mean by affordable?

Today's standard rule of thumb for finding an affordable home should be adjusted by factoring out property taxes from your total monthly costs when shopping for homes.


Key Takeaways

● Affordable housing explained

● Laws behind affordable housing

● Affordability rates and regulations today


Understanding Affordable Housing

Affordable housing types vary. Below are a few examples.

Low-income housing: Low-income housing units typically include apartment complexes and single-family homes, according to HUD. These units may be owned by private landlords or nonprofit organizations and have rents that are set below market rates, which means they can be affordable for people with low incomes. In addition, tenants might also receive assistance with their rent payments from federal government programs such as Section 8 vouchers and public housing subsidies, notes HUD.

Moderate-income housing: Moderate-income families have incomes that fall between 80 percent and 120 percent of the median income in their area, states HUD. This type of affordable unit includes both apartments and single-family homes that have rents that are set below market rates but not as low as those in low-income units.

High-income housing: High-income affordable housing provides rental opportunities for households whose incomes range from 121 percent to 200 percent of the median income in their area, explains HUD. Rents charged at these properties tend to be lower than those charged at market rate properties, but higher than those charged at low- and moderate-income properties.

Tenants who qualify for high-income affordable units often receive help with their rent payments through tax credits and other government programs.

Affordable housing laws are a complex network of regulations and statutes at both local and federal levels. Affordable housing issues can be dealt with by state and municipal agencies that deal specifically with zoning, building codes, environmental concerns and other real estate matters. Some of these agencies operate independently while others report to larger umbrella organizations that are national in scope.

Regardless of its nature or location, affordable housing must conform to local regulations regarding size, density, functionality, location and construction materials in order to comply with zoning codes or occupancy ordinances.

When looking at affordable housing, there are several important factors that must be considered.

Firstly, low-income families can qualify for subsidies from federal and state agencies that help them afford housing costs.

Secondly, many cities have zoning laws that require developers to include affordable units in new developments in exchange for density bonuses or other benefits.

Lastly, many local governments offer programs and incentives designed to encourage developers to build affordable housing units within their jurisdictions. These incentives typically take two forms: tax abatements or inclusionary zoning requirements.


Related Terms

Affordable Housing- It’s hard to find employment without affordable housing.

Apartment- Many consider living in an apartment to be more affordable than owning a home.

Financially Challenged Communities- Many low income residents also live infinancially challenged communities.

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