Affordable Housing vs. Public Housing Understanding the Differences and Importance

The terms affordable housing and public housing are frequently used interchangeably, they represent two different notions of housing policy, and both are now important in the provision of homes for low and moderate income earners.

Considering that more and more people look for safely, securely and cheap housing, it is important to learn the differences between affordable and public housing, as well as the problems and opportunities each type of housing offers to societies.

While assessing affordable housing vs. public housing, it is imperative to understand what they are.

What Is Affordable Housing?

Low income housing is commonly referred to as housing units that can be obtained by residents with moderate incomes, that is, they should spend no more than 30% of their income on shelter, whether that be rent or mortgage, utilities and property taxes.

This term covers not only the state-funded but also the apartment owned by private persons and usually addresses those people who, on one hand, earn too much for a state-subsidized apartment, and on the other, cannot afford an apartment in a regular market.

Purpose of Affordable Housing

This seeks to provide housing for middle and low-income earners to avoid putting them under tremendous pressure from high costs that make them end up homeless or being relocated from the rental homes they occupied.

It may be important for a community not only for the provision of housing but also for economic development to have the means for creating affordable housing so that the local economy would be supported by a strong work force.

Low paid employees especially those in ‘frontline’ occupations such as education, the National Health Service, and service industries are often excluded from public housing, yet market rent is becoming unaffordable to them.

Such people are able to comfortably find dwelling units close to their places of work thereby saving on fuel costs, creating business for local merchants and participating more on the neighborhood activities.

Who Builds Affordable Housing?

Housing for the poor can only be undertaken through a combination of grants and loans from various sources.

Local government may offer incentives such as the Low-Income Housing Tax Credit – LIHTC to encourage developers to construct or rehabilitate affordable units and coalitions between local governments, non-profit organisations and private developers to make affordable units viable.

Constructions should provide affordable housing.

Understanding Public Housing

Public housing, however, is owned and managed by state organizations for permanent residence mainly for very low-income persons and households.

Public housing which was formed under the Housing Act of 1937 provides low-cost homes to rid the country of substandard housing conditions which cannot be afforded through the market cost.

These are properties that are owned and run by the PHAs and mainly funded by federal monies, primarily HUD.

There’s always a limit on what a tenant can pay for rent and this is usually equivalent to 30% of the former’s income.

Goals of Public Housing

The main goal of the public housing is to offer decent and affordable homes for the lowest income populations in the state and these include the elder, the disabled as well as those regarded as having barriers to housing.

Formerly, housing is a critical facet in addressing homelessness and guaranteeing that endangered groups obtain housing.

Who Qualifies for Public Housing?

Public housing is usually reserved for the low income families, specific family sizes, and non-citizens immigrants.

According to the recent HUD guidelines only the low income neighbourhoods groups who earn less than 80% of the AMI are allowed but those earning below 50% of the AMI have preference.

In some highly-demand areas, the local public housing authorities could go farther and offer subsidy to everyone only if the families are extremely low income.

Affordable Housing vs. Public Housing – The Key Differences

Although affordable housing and public housing are services with relatively similar objectives of offering housing for low, moderate income earners and families, they are different in terms of financing, operation, and qualification criteria.

Following are the key differences while assessing affordable housing vs. public housing

1. Ownership and Management

While weighing affordable housing vs. public housing, ownership and management are the critical points.

Public housing are owned by the government, though administration is done by local or regional housing authorities that operate under federal grants.

While on the other hand affordable housing is not limited to being developed and owned by only the government it can also be developed by private developers, non-profits and government related organizations.

Owners of affordable housing dwellings are usually awarded incentives in form of tax credits or may receive grants and not direct federal subsidies.

2. Funding Sources

Funding sources is also a key differentiator while assessing affordable housing vs. public housing.

Public housing depends mainly on the federal funds from the HUD, which funds the construction and operation of units.

On the other hand, affordable housing projects are mainly financed through a number of risking schemes like the federal tax credits, state and local grants and private equity.

In this case, the LIHTC program has been credited for its ability to help make affordable housing projects financially feasible for private business people.

3. Eligibility and Target Population

Public housing is oriented to the population with extremely low income, while affordable housing is designed for low- and middle- income individuals and families.

Common guidelines usually existed in screening eligible families for public housing while less rigid approaches are normally applied in screening families for affordable housing.

4. Scope and Availability

Owing to limited funds, public housing supply cannot meet demand, and people spend years on the waiting list.

On the other hand, the affordable housing which has been spurred by incentive based solutions stands the best chance of growing a little faster as more municipal and state governments get into policies promoting for it.

Challenges and Solutions for the Future of Housing

Currently, cost effective and public housing types have undergone a lot of problems with the increased demand.

Due to high barriers of entry in most cities, families have to wait for long before they can be housed; individuals are forced to live many to a room and highest advocates for homeless tenants as demand for affordable housing units’ surges.

Public housing has its challenges which include; inadequate funding, deteriorating physical structures, and bureaucratic hindrances that an organization can have that may lower the standard and the stock of affordable housing units.

While affordable housing projects face issues with lack of policy support, community opposition, and high land and construction costs that often prove uneconomic for the projects.

Strategies for Improvement

To address these challenges, governments and community organizations are exploring a variety of approaches:

1. Increased Funding and Subsidies

It also means calling for higher federal and state financial support for both affordable and public housing to increase the choice and enhance the quality of the product.

2. Inclusionary Zoning

Individual city governments have begun enforcing ordinances that mandate new construction projects in their communities to contemplate for affordable housing units hence increasing accessibility of housing.

3. Community-Based Support

Working with people and organizations at the community level may reduce resistance to such developments and enhance fair use of housing units.

Conclusion: Affordable housing vs. Public housing

Despite the fact that both affordable and public housing perform unique and important functions of providing housing, while assessing affordable housing vs. public housing, there are important differences between them.

Special affordable housing offers hope to the needy who cannot secure a decent home in public housing due to legal restrictions while affordable housing offer working-class and middle-income earners decent homes that are cheap to manage.

Both categories of housing bring about several difficulties that need the cooperation of government, developers and society.

Anytime a community invests in public and affordable housing, the goal is to achieve stability in life, better economic climate and quality living spaces that shape our cities and neighborhood for the need of people.

Also read: Public Housing Production in Turkey within the Framework of Sustainable Urban Development and Construction