What Exactly is Affordable Housing?

When discussing homelessness, the term affordable housing often always appears. We often hear that the lack of affordable housing is the root cause of homelessness, and that we need more affordable housing as the solution. But what exactly is affordable housing, and how will it help those experiencing homelessness?

The federal Department of Housing and Urban Development (HUD) defines affordable housing as housing that can be obtained for 30% or less of a household’s income. However, this definition is quite loose, as it varies from state to state, even city to city. 

 The majority of states have a severe shortage of affordable housing. The National Low Income Housing Coalition publishes an annual report illustrating “the housing wage” an individual would need to earn full time–40 hours per week, 52 weeks a year–for a two-bedroom rental unit to be affordable by government standards. Nevertheless, this housing wage is still higher than what low-income workers make, and particularly in states such as California and New York, the housing wage is exceptionally high.

One problem with the government’s definition of affordable housing is how Area Median Income (AMI) can exaggerate housing affordability, specifically in high-income areas. Using the local median income to determine affordability, the AMI suggests that the city has increased its housing affordability when lower-income households leave the site due to high prices.  Therefore, this distortion becomes considerable because the highest income areas are often the least affordable. 

As cities across the country seriously lack affordable housing, homelessness remains an acute and visible issue. Many policymakers and analysts agree that the inability to afford housing is the number one root cause of homelessness. According to the National Low Income Housing Coalition, there is a shortage of over 7 million affordable homes for the 10.8 million plus low-income families. Further, in no state or county can a renter work full-time at minimum wage and afford a two-bedroom apartment. 

What does this mean?

It means low-income households are often only one bill away from losing their home. Further, those currently experiencing homelessness struggle to afford a home, even with a job, as the current position and wage market cannot adequately meet the housing market’s prices.. 

While there are many causes of homelessness, such as mental health, addiction, or job loss, the ultimate reason is the lack of a stable home, so providing permanent supportive and affordable housing should be a priority for policymakers. 

But how can housing be made more affordable?

In the face of these housing challenges, the government can address three areas: increasing investment in affordable and social housing, improving targeting public support for housing, and making the private rental market more affordable.

Ultimately, increasing the supply of affordable housing is a central piece to affordability. If there are not enough homes to go around, there will be people who lose out to those people who have the least money to spend. For housing to be more affordable, there needs to be more homes.

While affordable housing may seem like an abstract subject, one too far off for people like us to  comprehend, there are many ways you can impact the affordable housing scene. The most significant and impactful way is to use your voice, advocating for more affordable housing in your area and voting for politicians with the same values.

Increasing affordable housing may not be the only solution to homelessness, but it is a necessary step in the right direction.


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