Defining Affordable Housing: From Policy to Reality

Affordable Housing, as defined by the Department of Housing and Urban Development (HUD), refers to housing for which the occupants pay no more than 30 percent of their income for gross housing costs including utilities. [1] However, when one considers 30 percent of a $1 million income and 30 percent of a $20,000 income there is a significant difference, illustrated in the diagram below.

Affordable Median Income (AMI) or Median Family Income (MFI) identifies families at the middle and lower end of the income spectrum. The MFI is the income of a family that falls right in the middle of this income distribution. In other words, it does not calculate the average income, but rather the income of those in the middle with half of families earning less and half earning more.

To determine eligibility for affordable housing programs in New York, for example, the government looks at the MFI for something called the New York Metro Area, which includes the five boroughs plus Putnam County. The MFI for New York Metro Area is $76, 800. [2]

When we talk about affordable housing the central question becomes affordable for whom?

Housing has a long life cycle. The majority of New York City’s residential buildings were built before World War II. The physical, social and economic landscape of the city has undergone significant shifts throughout its history, creating and recreating a series of housing programs. As political climates and economic conditions change, the design of housing programs and the concept of affordability and the role of public funding evolves to meet present day needs.

Over the years, the government’s role in affordable housing has shifted, moving away from the 1970s model of building, owning and maintaining public housing, towards beginning in the 1990s and 2000s incentivising private developers and investors through tax incentives, low-interest loans, and other subsidies to create affordable housing units within their developments. The housing crisis and recession of 2008 has made these market-driven programs more problematic, once again calling into question the current structure of affordable housing programs.

As we continue to grapple with political and economic uncertainties, we believe that a more productive discussion lies in expanding the definition of affordable housing. The housing realities and measures of affordability vary greatly as we move across the country. Yet, one thing remains constant. Every single county in America faces an affordable housing crisis. [3] There is an imperative that we begin to look at existing untapped resources and innovative ways in which to ensure access to housing for as many people as possible. In the context of the critical demand for affordable housing, we are exploring a number of typologies that might offer clues to expanding affordability. These new typologies include both old and new responses to housing.

[1] Glossary, HUD User https://www.huduser.gov/portal/glossary/glossary_a.html

[2] What is Affordable Housing, CUP, 2009

[3] Capps, Kriston. “Every Single County in America Is Facing an Affordable Housing Crisis.” CityLab. June 18. 2015. Accessed July 11, 2016.

http://www.citylab.com/housing/2015/06/every-single-county-in-america-is-facing-an-affordable-housing-crisis/396284/