What is Affordable Housing?
In my hometown of Valparaiso, Indiana we are going through a culture shift like many of the communities throughout Indiana. We have old buildings being bought, businesses moved, and new housing and business units being put in.
This is both a blessing and a curse for the community. The benefit is that the community is growing and preparing for the future. The curse that the old-town feel is going away. Within 10-years the town will no longer be the same. All of the old nostalgia will be gone and a whole new culture feel will have arrived.
As with all change people are not happy while others who are embracing the change are. Everyone wants to see their community grow. They want to see it grow without losing what started out at making it great.
With all significant advances many lose site on those within the community that are only one paycheck away from being homeless. This is where affordable housing comes into play. I kept seeing questions about affordable housing and I had my own opinions on what it is but what truly is affordable housing? That is the question we are going to dig into and answer here.
I believe everyone deserves a home that is affordable and is a human need that many struggle to achieve. I don't think anyone will disagree with that. The impacts of housing costs reach more than just the cost of the house. High housing costs make it difficult for small businesses, schools, utilities, and people to afford paying for food, healthcare, or even owning transportation to get to/from work.
People shouldn't have to choose between one basic need for another. Affordable housing helps individuals and families so that they don't have to choose between basic needs.
Affordable housing is housing that a household can pay for, while still having money left over for other necessities like food, transportation, and health care. That means that what’s considered “affordable” depends on a household’s income and isn't some magical number someone decides.
What is affordable for one may not be affordable for another. This is one of the items I never realized. I always believed in our politicians that made up arbitrary numbers of what reasonable was. As I have gotten older my mind continues to open. I continue to cut my own expenses and what I struggled with years ago is now affordable today without having a change in my pay.
Our federal government defines housing as affordable when it consumes no more than 30 percent of a household's income. In Indiana, the minimum wage is $7.25. If you work 40 hours per week every week of the year you will have an income of $1,257.67 (before taxes). If you use that number if your rent and/or mortgage is more than $377/month you are not living in affordable housing. If you are a family the number is double that if you are both working. If you are at the "new wage" of $15/hour everyone is pushing for your affordable rent amount is $780/month.
The key here is affordable housing isn't just for those who are struggling paycheck-to-paycheck but to everyone. If your expenses for your rent/mortgage is more than 30 percent, the United States Government says you're not living in affordable housing. You may be okay with that, but this is what everyone should have available to them.
Affordable housing should be available to everyone from high-income earners, hourly wage workers, to people experiencing homelessness, and everyone in between. The rent or home price that is affordable will vary from one household to the next, but the need for housing that is affordable is shared by everyone.
The high-income earners are rarely a community concern as they have the funds available to them. Others are not as fortunate, and a growing share of the population cannot afford the increase in housing costs. Nationally, more than one in seven households are what economists call “severely cost burdened.” This means that they pay half or more of their income on housing.
You probably wouldn’t be surprised to hear that the lowest-income households are the most likely to find themselves in this crunch. 70 percent of the lowest-income households (those with less than about $15,000 in annual income) are severely cost burdened.
Often people living in affordable housing in communities that are growing see their rents go up. Not due to property improvements but that the owners of those properties want more money. This is part of what makes America great but also what further hinders those in need from also achieving the American dream. This is where rental caps are required by our local government to stop those that look to exploit those most in need of help.
This isn't just a renter's problem. Those that own homes also fall into the affordable housing arena. Although more than a quarter of renters—11 million households—have severe housing cost burdens, so do about 1 in 10 homeowners, for another roughly 8 million homeowners.
One of the biggest problems with affordable housing is the "Not in My Backyard" attitude that surrounds the problem. Everyone wants to believe that they live in a utopia of true and utter happiness. That there are no problems around them. That isn't true and if you look at your own life, you'll see that there is room for improvement. We all can improve. We all can help our fellow community members. It is only when we all work together that we can achieve the utopia and become a vital and robust community.
Indiana is very unique. We all have in our hearts this utopian feeling. Some of us keep it closer to our hearts than others. We all have it in us to make our communities stronger. Awareness is the first step. Opening your heart is the next. Helping educate our politicians that there is a problem and it is in our backyard will help them open their eyes.