The Definition of Affordable Housing

This paper evaluates three critiques of the 30% of income criteria typically used to define housing affordability. It is important to evaluate them because this standard criterion is commonly used to assess needs and establish eligibility for most federal, state, and local housing programs (Miles et al. 2007). Evidence is presented that supports several concerns, suggesting that affordable housing studies and programs should go beyond the 30% income criterion and pay more attention to neighborhood quality, accessibility, and the ability of families to afford non‐housing essentials. Regarding non‐housing essentials, there is a particular need for better information about how much money should be budgeted for healthcare and childcare by lower-income families to determine whether their non‐housing essentials can be paid for after spending 30% of their income on housing and utilities.

The provision of affordable housing is a key goal for many agencies and organizations in the USA. In 2004 Odell et al. (2004) called affordability the greatest housing problem in the nation. Since the last recession, the incidence of severe cost burden, where a household pays more than half its income for housing, has risen sharply. By 2010, more than 20 million households were severely cost-burdened (Joint Center for Housing Studies of Harvard University 2012). In comparison, in the 4th quarter of 2011, about 11 million homeowners were underwater on their mortgages (Madigan 2012). And in 2009 about 5.7 million housing units had severe or moderate physical problems (US Department of Housing and Urban Development and US Census Bureau 2009). So, while affordability is not the only housing problem, it may indeed be the largest.

Also Read: How affordable is affordable housing?