Housing Affordability

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Welcome to...
Companion PowerPoint Presentation for the
Introduction to Housing textbook
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Housing Affordability
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• Lack of affordable housing is a crisis for both
  communities individual households
• For communitiesattracting keeping employment
  opportunities quality neighborhoods
• For householdsself-sufficiency, stability
  improves life outcomes for children
• There is debate on this issue

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When is Housing Affordable?

• A household should spend no more than 30 of its
  total income on housing costs, including mortgage
  or rent payments utilities
• More than 30 housing cost burdened
• More than 50 severely housing cost burdened
• Variety of housing affordability indices exist

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• 13.4 million renter households 14.5 million
  owner households have housing affordability
  problems
• Factors influencing affordability
• Income level
• Household size
• Geographic variation
• Affordability is tied to a particular geographic
  areas median household income median housing
  costs

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Households and Housing Costs

• Median cost of a new single-family home
• 1982 60,300
• 2002 187,500
• Increase of 170
• Due to
• Inflation
• Increases in cost of materials labor
• Increase in land values
• Regulations development charges
• Households demands for more space of higher
  quality

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Homeownership and Affordability

• Affordability index relationship between the
  median income in an area and the median income
  required to quality for a mortgage
• 100 households with median income could
  purchase the median priced home
• In 2002 136.4
• But minority, single-parent low-income
  households face greater affordability problems

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Renting and Affordability

• Poor households that rent suffer the most severe
  housing cost burdens
• Supply of low-cost rental housing units has not
  been sufficient for the demand
• Much of that housing is old located in
  neighborhoods with little access to jobs
  adequate services
• Government assistance is available, but is not
  adequate

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Understanding the Shortage

• Increasing the cost of housing Additional space
  amenities
• Compared to 20 years ago homes are
• Larger
• Have more bedrooms (3-4)
• Have more bathrooms (2 ½)
• Have at least a two-car garage
• But, smaller lot

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• Increasing the cost of housing The role of local
  government regulations
• Increased government regulation leads to higher
  housing costs decreased amounts of new
  construction
• Impact fees
• Code restrictions
• Growth restrictions
• Exclusionary zoning

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• Increasing the cost of housing Failure to
  preserve existing affordable housing
• Loss of affordable units to gentrification
• Loss of units due to lack of repairs
• Too expensive to rehabilitate units under new
  codes, so are demolished or left to decay

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Homelessness

• For some families, a failure to find affordable
  housing leads to homelessness
• Homelessthose in shelters or in a public or
  private place not designed for, or ordinarily
  used as, a regular sleeping accommodation for
  people (800,000 each night)
• Hidden homelessliving with relatives or friends
  (doubled up) in overcrowded conditions or living
  in substandard housing

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• Who are the homeless?
• Families with children (fastest growing segment)
• Single adults, often men 30-50 but many women as
  well
• Runaway youths
• Suffer from mentall illness
• Struggle with substance abuse

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• Need affordable housing
• rental assistance
• Need to earn a sufficient wage
• living wage
• Shelters (day and/or night)
• Temporary assistance through nonprofits

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Solving the Affordability Problem

• Public education effortsthe public must support
  the need for affordable housing and be willing to
  provide the necessary support
• Land use strategies to reduce the cost of housing
  
• --higher density mixed-use
  development
• --inclusionary zoning
• --Community Land Trust (CLT)

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• Reduction in building management costs
• --streamlined building methods
  standardized components
• --factory-built housing
• --donated labor materials
• --resident labor (sweat equity)
• Reduction in finance costs
• --low-interest loans for constructing or
  rehabilitating affordable housing
• --Low Income Housing Tax Credit
• --HOME CDBG

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• Increase resources for housing
• --to builders to produce affordable
  housing
• --home purchase assistance to low-
  moderate-income homebuyers
• --Public Housing Section 8 vouchers to
  renters