Affordable Housing: An Explanation

An affordable housing building in Uptown, Chicago

The Harold Washington, an affordable housing building in Uptown, Chicago


While outlining my ideas for this blog, I realized that the language of affordable housing is obscure. The information surrounding housing is convoluted, confusing and copious. It is scattered throughout programs overseen by the Department of Housing and Urban Development (HUD), as well as other, related, federal and local government agencies. Some programs, such as the Housing Choice Vouchers Program (otherwise referred to as Section 8), have both federal and local regulations. Terms, income limit is a common example, change parameters based on geography and programmatic application.

If I am to have valuable discussions about affordable housing and its surrounding issues, I must first explain the terminology. To that end, I am creating a glossary of terms associated with affordable housing and its policies. I will begin with affordable housing  because it is the most common term used when discussing housing for the poor.

Its most basic definition, and the one used by the Department of Housing and Urban Development (HUD), is housing, including utilities, that costs less than 30 percent of the household’s income. This definition is meant to be used as a general guideline for people at all income levels -a person making $10 million a year should not spend more than $3.3 million on housing; at an income of $50 thousand a year, the amount allocated for housing drops to just over 16 thousand; at $11, 670 a year (the income at which the Department of Human Services (DHS) determined a one person household to be in poverty in January 2014), a person should not spend more than $3, 890 per year or $324.16 per month on rent and utilities combined. While the 30 percent rule seems attainable to those with solid incomes, the further a person ventures down the economic ladder, the harder it becomes to find housing at the necessary price point.

In Chicago, for example, median rent for a one bedroom apartment ranges from $600 in the South Chicago neighborhood to $2,020 on the Near North Side, with an average of $1,737 citywide. Even the least expensive market rate apartment is out of reach for a person working full-time at a minimum wage job.

In common usage, therefore, affordable housing is analogous with poverty.

The 30 percent guideline for affordable housing has its origins in the Housing Act of 1937, which created the nation’s public housing program. Tenants of public housing buildings were allowed to have an income of up to five or six times their rent, with no maximum rent imposed on landlords. In 1940, this policy was amended: rents could not exceed 20 percent of a tenant’s income. By 1959, local housing authorities were given more autonomy over the rents they charged, resulting in rent spikes and a loss of affordability for the very poor.  The Brooke Amendment (1969) to the 1968 Housing and Urban Development Act mandated that tenants spend only 25 percent of their income on rent, thus eliminating maximum rents and ensuring affordability (disparities between rent charged and rent paid by the tenant are subsidized). The limit was raised once more in 1981 to 30 percent, the current standard.

Today, a resident of an affordable housing building with $1000 per month in income  (either from work or from government assistance) will pay, in most areas, $300 each month in rent, regardless of their other expenses or the market cost of their apartment.

According to a 2006 report by the American Community Survey (ACS), the majority of renters in the lowest income quartile who live in market rate units –which are not regulated for affordability –spend more than 50 percent of their income on housing, far exceeding the guidelines for reasonable spending. With such a cost-burden, how can the poor find stability? How can they adhere to an American standard of living?

The answer, of course, is they cannot. The lack of affordable housing, or housing that is affordable to the poorest people in our nation, is unconscionable. In the most prosperous country in the world, everyone should have access to shelter. It is our right, as humans.

Affordable housing, for the purposes of this blog, is defined as housing whose cost is less than 30 percent of the tenant’s income; in theory, affordable housing exists for everyone.





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