What is affordable housing?

A four word question that is answered by the Federal and State governments with thousands of pages of laws and regulations.

The simple answer is housing that doesn't cost more than thirty percent (30%) of your family income.

Why thirty percent (30%)? Good question.

We as a country have generally agreed that housing expenses shouldn't be more than 30% of what you earn, leaving 70% of your income for food, clothing, transportation and other necessities. If you spend more than 30% of your income on housing expenses, you are considered "overburdened".

A broader definition of the term "affordable housing" describes an entire industry centered around the provision of this type of housing. There are dozens of programs designed to make housing more affordable.

Many of these programs you think of immediately like the Section 8 Housing Choice Voucher Program. Other programs that make housing more affordable are very common but people don't think of them as "government programs".

One such "affordable housing program" is the mortgage interest deduction. In fact, this is the largest of all housing subsidy programs. More than 34 million homeowners claim the deduction each year claiming more than $68 billion in housing subsidies. Unfortunately, the way the MID is structured, more than 34% of those benefits go to families earning more than $200,000. So in this case, an "affordable housing" program is subsidizing large, luxury homes for the wealthy making those homes "more affordable".

Affordable housing can refer to both for sale and rental housing. There are many homeownership programs (in addition to the MID) that help lower income persons and first time home buyers purchase modest homes at reasonable rates. Many Americans have relied on these homeownership programs to help them get started in their first home.

Rental housing is made affordable by many Federal and state programs. More than 80,000 apartment communities across the country are assisted with one form or another of government assistance. These apartment communities make renting an apartment affordable for millions of Americans.

So, the answer to the question "What is affordable housing?" is complicated and the answer really depends on your perspective.