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Thread: Affordable Housing

  1. #1
    Cyburbian donk's avatar
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    Affordable Housing

    From another thread and out of curiosity and to spark debate. What do you consider to be affordable housing, and how would you measure it.

    For reference and to start things off a few definitions.

    Stats Can defines affordable housing as housing costing less then 35% of the household income and includes minor carrying costs associated with the dwelling unit.

    When I got my mortgage the Bank would not allow my monthly payment to exceed 20% of my household income (me).

    Others define it as "Rents that are affordable to households whose annual income is 80% or less of the median income range for the county in which the property is located.

    The median income range and other applicable income limits are outlined on charts published by the Washington State Housing Finance Commission, HUD and USDA Rural Housing Service."

    I think when defining affordable housing you need to look at total "normal" living cost. For example, If I choose to live downtown, but don't have to have a car, but my rent is sky high it might not meet the definition of affordable housing as compared to someone who has to pay for a car to drive to work everyday.

    Anyone else?
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

  2. #2
    Cyburbian Cardinal's avatar
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    This may be a very interesting thread. I think we will find multiple answers. For instance, there is affordable rent and affordable ownership. While rentals may be affordable, especially with government programs to limit rents, what about the idea of home ownership? Take, as an example, a home that recently sold near here. It is a two-story brick Italianate, probably 1800-2000 square feet on 3 acres, built in the 1850's. It would have probably sold for about $200,000 (give or take $20,000). That is pretty typical for a really nice home here. That same home would not sell for less than $350-400,000 in California, where $200,000 is considered entry-level. The greatest implication for this is that homes have traditionally been the best vehicle for lower- to middle-class savings and investment. What happens when home ownership is out of the range of households earning $50-75,000 per year?

  3. #3

    Affordability Location Efficient Mortgage

    Two items jump out from your discussion. Location efficient mortgages (Chicago/Fannie Mae product) are based on prosimity to public transit. Transportation costs are almost as much as housing (high 20s vs 33%) so LMIs are based on having less transportation costs so one can afford more mortgage for their home. This pioneering work is quickly spreading and really makes public transit so much more valuable to a community. Main topic: definition of affordable - many of us in Massachusetts are faced with an Executive Order which calls for the creation of affordable housing products to serve up to 150% of median income to serve the missing middle (class). Most define Low and Moderate income as stated earlier, up to 80% of MSA. But low and moderate does not necessarily equate with affordable, thus definitions ranging up to 150% based on localities (the 150 is Nantucket) with subsequent home rule petitions to the legislature to assure permanent deed restricts to maintain affordability. This is because we have a huge housing crisis with among the highest housing costs in the nation. The most glorious definition I ran across was the City of Worcesters which went something along the lines of we define affordable however any funder does. or words to that effect

  4. #4
    Cyburbian donk's avatar
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    I guess, with respect to affordability I am rather spolied.

    I live in an area/province where once the dwelling is purchased it is affordable. It is the CMHC's and banks requirements for a down payment that limit many low income people's ability to purchase a house. (10% down plus mortgage insurance or 25% down no insurance). One thing that happens here frequently is that the builder holds a chattle loan against the property instead of a mortgage. This happens primarily with mini/mobile homes, hence people find them more affordable as there is no down payment required.
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

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