Affordable Housing, Defined

Writing in Money, Brenden Rearick comments that “when it comes to fair-cost housing, the concept of which homes are "affordable" for low-income families is more muddled than its ever been.” Rearick embarks on an exploration of what ‘affordable housing’ really means and how the term has changed over the decades.

“Half a century ago, the Housing and Urban Development Act of 1969 forced landlords of public housing projects to cap rent at 25% of a tenant’s income. In 1981, the cap was raised to 30%.” However, “The ‘30% rule’ is a relic of a time when Americans made more money relative to their cost of living, and carried less debt overall. In the four-plus decades since the Housing and Urban Development Act was last updated, the cost of housing and consumer goods have vastly outpaced the growth of wages.”

This imbalance, along with the uniqueness of different households’ financial situations, means the 30 percent rule “flattens people’s experiences” and fails to support the families who need assistance most.

One proposed measure that could replace the 30 percent rule is “to factor in "residual income" — or money that's leftover after a resident's basic needs are met.” Experts argue this measure would more accurately reflect household needs. For now, the 30 percent rule dominates how housing assistance is distributed.