What is “Affordable Housing” to you?
Is it houses priced under $150,000 – or $300,000 – or $500,000 – or anything under $1,000,000?
Is there a commonly accepted definition of “Affordable Housing”?
What if we were to switch the words to be “Housing Affordability”?
I found this “stab” at a definition on the HUD site from the EDGE on-line magazine.
Defining Housing Affordability (Hit this link for the full article)
” Housing programs in the United States have long measured housing affordability in terms of percentage of income. In the 1940s, the maximum affordable rent for federally subsidized housing was set at 20 percent of income, which rose to 25 percent of income in 1969 and 30 percent of income in 1981. Over time, the 30 percent threshold also became the standard for owner-occupied housing, and it remains the indicator of affordability for housing in the United States. Keeping housing costs below 30 percent of income is intended to ensure that households have enough money to pay for other nondiscretionary costs; therefore, policymakers consider households who spend more than 30 percent of income on housing costs to be housing cost burdened. A panel at the Conference on Housing Affordability, presented by the American Enterprise Institute, Bank of Israel, Board of Governors of the Federal Reserve System, Tel Aviv University, and the University of California at Los Angeles, focused on this measure of housing affordability. The panel, chaired by Susan Wachter, professor of real estate and finance at the University of Pennsylvania, explored the causes and consequences of high housing cost burdens and the challenges associated with the 30 percent of income affordability threshold before presenting an alternative method of measuring housing affordability.
The first thing I noticed about this article is reference to: “policymakers consider households who spend more than 30 percent of income on housing costs to be housing cost burdened.”
Interesting . . . I do not see a date of publication on the article, but I know that the loan qualification tolerance has climbed significantly higher than the 30% referenced . . . even as high as 50%.
No matter how we spin this, the one thing we know for sure is that this climate of ascending cost of living combined with rapidly climbing Housing Market Appreciation is out-pacing income increases at an alarming rate thereby giving rise to fewer families participating in “The American Dream of Home Ownership” . . . That dream is drifting away from possibility for many of us Americans.
Some things that happen in an environment like this:
- “Gentrification” pushes “average” families out of their long-time neighborhoods as developers “scrape” the old houses and build higher density projects.
- Communities perish as the displacement relegates them to resort to renting instead of owning.
- Diversity shifts towards homogeneity of culture, look, and feel.
- As the “growth” increases, so does the cost of living result in the mid to lower income (labor force) having but one choice . . . to move out of the core of the city to outlying burbs/cities.
- The absenting of resident labor force restricts the ability of the inner core businesses to attract employees . . . resulting in having to increase wages which leads to . . . even higher cost of living.
- A need for an efficient, low cost way to transport the needed labor from the outlying areas into the core in the form of “Mass transit” . . . which is VERY expensive thereby . . . increasing the cost of living in the form of increasing TAXES.
- Government regulation further complicates this whole scenario with inundation of developers pushing the boundaries of Zoning requirements and creative land uses.
This list could continue, but I think you’ve got the gist of it.
I have a dream that the American Dream can survive this threat of extinction for the “Average American”!
My vision includes some interesting “community building initiatives”
- Create “Inter-generational” neighborhoods with Schools and Community Centers at the HUB
- Radiating in concentric circles from this hub – an array of all kinds of housing – First (closest to the Center) Rental apartments/houses . . . then for 1st time Buyers Houses and Condos . . . then Homes owned by “move-up” families . . . and finally “retirement” and assisted living.
- The Grandchildren live in the same neighborhood as the Grandparents
- I believe this concept turns the current trend upside down . . . Each “ring” of this neighborhood embraces every inner ring with the children (schools) in the center being embraced by ALL!
There’s REAL power in wondering about possibilities.