Affordable housing
Affordable housing refers to housing that is financially accessible to median-income households, typically defined as costing no more than 30% of a household's gross income. This concept gains significance in the context of rising income inequality and escalating housing costs, affecting not just low-income households but also middle-income families. Various methods exist to measure housing affordability, including the median multiple indicator and the Housing Affordability Index, both of which consider income levels relative to housing prices. In the United States, the government has implemented several programs to alleviate housing cost burdens, primarily through the Department of Housing and Urban Development (HUD), which focuses on protecting low- and very low-income populations.
Factors such as gentrification have intensified the need for affordable housing by displacing long-standing residents as wealthier individuals move into communities. The post-COVID-19 era has further exacerbated these challenges, leading to housing crises in various regions. Despite the critical need for affordable housing, initiatives often face opposition from local residents concerned about property values and community aesthetics, associated with the notion of NIMBYism (Not In My Backyard). Additionally, legal and bureaucratic hurdles, including restrictive zoning laws, can hinder the development of new affordable housing units.
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Affordable housing
Affordable housing is housing that median-income households can reasonably afford. Both the US and Canadian governments define affordable housing as that which costs no more than 30 percent of the gross income of a household. Other, more complex barometers of affordable housing have also been developed. In the United States, several federal government programs seek to address the growing problem of affordable housing.
Overview
Affordable housing can be quantified in several different ways. The governments of the United States and Canada both determine housing affordability as a straight percentage of gross income. Other means of calculating housing affordability include the medium multiple indicator, which calculates affordable housing by comparing median home prices and median income, and Massachusetts Institute of Technology’s Housing Affordability Index, which considers factors such as the distances between housing and employment locations.
As income inequality between classes has become more glaring, affordable housing has become an issue faced by not only low-income but also middle-income households, whose standard of living has been affected by rising home prices and rents coupled with wage stagnation across the professional spectrum. Professionals must increasingly count the costs of choosing to live in high-rent or high-mortgage areas close to work or in relatively affordable housing in areas that require lengthy daily commutes to jobs in city centers.
One basic definition of affordable housing is the ability for minimum-wage workers to afford housing in the communities in which they work. However, the National Low Income Housing Coalition reports that American households of under $50,000 of annual income suffer from disproportionate levels of “housing cost burden,” with 91 percent of those earning under $10,000 annually suffering from a lack of affordable housing.
The US government has several programs and initiatives aimed at relieving the housing-cost burdens of both low- and middle-income households. Homeowners are allowed to deduct their mortgage payments from their taxes, while low-income households may qualify for government subsidies. The US Department of Housing and Urban Development (HUD) has traditionally prioritized issues of affordable housing (Fair Housing Act).
HUD’s Office of Affordable Housing Preservation (OAHP) has three programs focused on affordable housing. The HOME Investment Partnership program, through grants to local and state governments, focuses on subsidizing housing for low- and very low–income households; low-income households are defined as between 50 and 80 percent of the area median income (AMI), while very low–income households have an AMI of under 50 percent. OAHP’s Self-Help Homeownership Opportunity Program (SHOP) enables nonprofit groups to buy homes needing refurbishing for low-income households, insisting that the work be done by community volunteers. The Homeownership Zone program provides communities funds to purchase properties left vacant or in disrepair in order to build neighborhoods of new housing.
HUD also provides housing subsidies under section 8 of the Housing and Community Development Act of 1974. Other American organizations concerned with affordable housing include the United States Department of Agriculture’s Office of Rural Development and the Federal Home Loan Banks.
A number of factors can drive up the cost of housing and heighten the need for more affordable housing. For example, gentrification, the process by which low-income residents are displaced by wealthier individuals and businesses moving into a community, occurred in many cities across the US and Canada during the late twentieth and early twenty-first centuries. Since gentrification makes it harder for longtime residents to afford to rent or buy homes at market rates in the communities they call home, affordable housing can reduce financial pressure on these people and make it less likely that they will need to relocate or be displaced by newer, wealthier residents. Rising home prices and soaring interest rates in the years following the COVID-19 pandemic further highlighted the difficulties many people faced in affording housing, and many parts of the country experienced full-blown housing crises during this period as federal, state, and local leaders all looked to enact new legislation to help solve the problem.
However, there are a number of challenges to building affordable housing, which sometimes faces opposition from individuals concerned with protecting the value of their own property or biased against low-income people. Opposition to the construction of new affordable housing in one's community may fall under the term NIMBYism, derived from the phrase "not in my backyard," which refers to support for strict regulations regarding land use in one's community and often includes opposition to new housing developments. Legal and bureaucratic obstacles, such as local zoning laws, can also make it difficult for governments and developers to construct new affordable housing units.
Bibliography
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