FAQs about affordable housing

Affordable housing in the context of the United States refers to rental or owned houses that citizens can afford, no matter their income bracket. The government specifies housing as “affordable” if it’s equivalent to or lower than 30% of a person’s income.

A U.S. citizen can quickly find out if his or her income will allow qualification for an affordable housing program, such as an apartment via the Low Income Housing Tax Credits (LIHTC) which is provided by the federal government. In most cases, earning less than 60% of the median income in your locale (also knowns as Area Median Income or AMI) qualifies you for such a rental apartment.

This is differentiated from subsidized housing, which does not mean complete government subsidy, but simply availing of housing assistance. In other words, the renter will only pay the rent portion determined to be affordable by the law, again based on the person’s income. Before qualifying for rental subsidies, (in which you’d only have to pay rent with 30% of your income), it must be proven that you earn less than 50% of the AMI.

Again, all of the government’s various housing programs are dictated by the AMI. This is important because cost of living and income generation vary per area or state. The government must therefore determine the median income per housing market to guarantee fair housing program distribution and implementation. This thrust has evolved and is manifested in the presence of various housing authorities that service both U.S. counties and cities.

Martin LaMar is the Regional Vice President of McCormack Baron Salazar. He aims to make an impact on housing, social, health, and education policies. He has over a decade of experience in the operations and management of affordable housing. For similar reads, visit this blog.