Affordable Housing vs Low-Income Housing: What is the difference?

There is lots of talk these days about the need for more affordable housing in the Southern California region. It is important to recognize the difference between “low-income” housing and “affordable” housing.

Low-income housing is subsidized by the government. There are several projects throughout the region that are monitored by local government housing authorities. An on-line search or call to the regional housing authorities will provide a list of available low-income housing rental projects. Some projects are for veterans, seniors and others for all-ages. There are also low-income for-sale housing projects sponsored by housing authorities and by organizations like Habitat for Humanity.

In these low-income housing developments, renters or home buyers must meet strict income guidelines. Only low-income can qualify to live in these developments. The income is determined by the income of the entire family and includes funds in the bank and investments.

Affordable housing, on the other hand, is not limited to low-income renters or purchasers. There is no limit to the amount of income a person or family has. It is their choice to live in the available affordable housing. Apartments, condominiums, and mobile home parks/manufactured housing communities are considered affordable housing stock in the various individual jurisdictions housing elements. Continue reading

Affordable Housing and Rising Rents

Sometimes it seems as though affordable housing is hard to find and rents seem to be on the rise.  Of course, the term “affordable” is subjective to begin with and it is easy to point the finger at the “greedy landlord”, but what is truly behind the lack of affordable housing and what is affordable housing?

First there is government regulated affordable housing, which limits the price of the housing (sale price or rent) and the income of the people who purchase or rent the “affordable” unit.  There are cost and income controls on these units.  Government may build these units and private developers may build them in exchange for various incentives.  In California every city that had a redevelopment agency had to set aside funds to build affordable housing for low-income buyers and renters.

Other types of housing that are generally referred to as affordable are privately owned properties that are not regulated by government.  Apartments in some areas generally fall into the “affordable” housing category because they do not cost as much as a site built homes in the area and because there are no requirements to put down a deposit and to qualify for a home loan – i.e. apartments are more “affordable”.

Overall, there are some general reasons why there seems to be a lack of real affordable housing (requiring restrictions on costs and incomes) to rent and to purchase.  As an example:

  1. Lending for affordable housing is scarce. Most lending institutions will not provide funding for such projects, this means developers must turn to private investors who with the current economic state are holding onto their pockets very tightly.
  2. The permitting process is long and clouded. Not only must they pass all required inspections, Affordable housing projects must move through a public input process before permits can be granted.
  3. Zoning restrictions may also impede affordable housing development. Many areas are zoned for other uses and it takes time and a lot of maneuvering through red tape in order for land to be re-zoned.
  4. Some cities have an affordable housing budget but it is not being utilized. San Francisco will have an estimated $20.6 million in affordable housing fees as of June 30, 2013. That is enough to finance up to 4,000 affordable housing units. Only 106 have been completed, 70 are under construction.