Affordable Housing is Such a Confusing Term

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Like most things in life, confusion is part of almost every equation. When taking a test, there are usually a couple of questions that could have different answers depending on your point of view. Instructions can be very confusing especially if you are being told how to do something for the first time.

Terms can also be confusing. Words like Accept / Except, Affect / Effect, A Lot / Alot and Allusion / Illusion are always head-scratchers when trying to figure out when to use the right one.

Affordable Housing is one of those confusing terms. Depending on who you ask, it could mean subsidized housing or simply what one can afford. The definition of affordable housing is defined by the federal government as being affordable when it consumes no more than 30 percent of a household’s income.

However, those days are gone for most of the US population with many homebuyers and even renters spending up to 50% of their income on housing which makes using affordable housing a very confusing term.

I suggest we use another term for housing that consumes no more than 30 percent of a household’s income. Let’s call that Attainable Housing. But even here we run into a confusing term. If someone is willing to pay 50% of their income on a housing unit, does that make it attainable or simply affordable?

Then we have Acceptable Housing which is housing that is adequate in condition, suitable in size, and affordable. One problem with acceptable housing is that many families try to reduce their housing costs by moving further away from job centers. But this simply increases their transportation costs — so a simple “affordable housing” metric might not capture the whole story.

Another problem is that the concept of Area Median Income (AMI) can exaggerate the affordability of housing in high-income areas. In the Washington, DC metropolitan area, for example, the median income was $129,000 in 2021, which means that a family of four with an income of $50,000 is considered “low income” for housing affordability purposes.

However, having an income of $50,000 in Des Moines, IA where the 2019 Median Income was $53,525 isn’t too bad. Again, it all depends on your point of view.

There are two basic types of policies that could make a large difference in housing affordability:

First, the government could directly give money or discounted housing to low-income families. Obviously, a family that receives a free house can now afford housing. By the same token, families that receive more money can afford a wider range of houses. Will the government give free housing to anyone?

It’s already happening at some local and state levels. Is it making much of a difference?

Second, policymakers could increase the number of dwellings in a given metropolitan area. This could be done either by relaxing restrictions on the size of buildings that can be built or by relaxing restrictions that mandate minimum sizes of individual dwelling units. Cities tend to have a number of zoning rules that artificially restrict the supply of housing.

This is what is happening to tiny houses, Auxiliary Housing Units, manufactured housing, and other types of housing that could easily make affordable housing a reality for many more people. Will it ever happen?

The bottom line is that Affordable Housing is such a confusing term that government agencies, for-profit, and non-profit housing developers, and offsite home factories only see the picture of need and how to subsidize it rather than helping people obtain true Attainable Housing in their area and if that means allowing alternative housing into their towns and cities, then we should begin doing it.

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