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Housing Development: The Key To Affordable Housing
Affordable housing is a term that is used to describe properties that the total housing costs of are deemed to be affordable to median income consumers. The term is often attached to rental housing within the financial means of people in the lower income ranges of an area, but the concept applies to both renters and purchasers in all income ranges. In both the United States and Canada, a common guideline for housing affordability is a housing cost that does not exceed 30% of a household's gross income. Taxes, insurance, and utility costs are usually included in this guideline. When the monthly carrying costs exceed 30 to 35% of household income, the housing is then considered unaffordable for that household. The economic expansion of the 1990s blocked out the evidence of certain trends and statistics that pointed to an increased, not decreased, need for affordable housing. Generally, the accepted definition of affordability is for a household to pay no more than 30% of its annual income on housing. Any families who pay more than 30% of their income for housing are considered burdened, and could have difficulty affording necessities such as transportation, medical care, food, and clothing. 12 million renter and homeowner households are now estimated to be paying more then 50% of their annual incomes for housing, and a family with one full-time worker earning the minimum wage will be unable to afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. This lack of affordable housing is a serious problem for low-income households, preventing them from meeting their other basic needs such as nutrition and healthcare, or saving for their future needs such as retirement and education funds. Housing affordability problems for individuals and families also mean economic and social problems for cities. Lack of affordable housing is a primary cause of homelessness. When cities cannot add new affordable housing where new jobs are created, traffic congestion and air pollution increase. Regional economies may lose billions of dollars a year in wasted fuel, delayed shipments, and lost work time. Many cities are realizing this problem, especially since the plummet of the housing market and the resulting wave of foreclosures and home losses. Fortunately, affordable housing developments are on the rise, allowing families to own a home even if they have a low household income. A recently proposed housing development in California is one of these. A non profit developer plans to start building 19 coastal town homes that will range between $299,000 to $360,000, with two simple requirements for applicants--that they are first time homebuyers, and that they be below the median income of the county. Housing developments like this are spreading through the nation, providing a welcome relief for consumers desperately in need of affordable homes. If you are considering purchasing a unit in an affordable housing development, you should still budget carefully using a mortgage calculator, and always investigate your mortgage rate options. |
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