What are the characteristics of affordable housing?
- The rent/mortgage payment and utilities typically add up to 30% or less of the resident’s pre-tax income.
- The cost of construction and/or maintenance is shared between residents and the public sector— city, state, and/or federal government.
- Affordability protections maintain cost stability—either permanently or for 20 to 40 years after development.
Affordable housing takes many forms, including the following…
- Privately run affordable rental housing, whether run by non-profit organizations such as community development corporations (CDC) or by for-profit companies.
- Expiring Use developments built by developers with public subsidies under the condition that affordability be maintained for a certain amount of time, after which the restrictions expire and the owner can charge market rents.
- Affordable apartments or condos within a “mixed-income” development that includes market-rate units. Under Boston’s inclusionary zoning requirements, 13% of the units in new large developments must have affordability protections.
- Limited equity cooperatives in which residents own a share of the cooperative and elect representatives to a board of directors.
- Public Housing, owned and run by a public agency such as the Boston Housing Authority.
- Affordable first-time home buying opportunities, made possible by state and city funding to developers. The purchaser must agree to equity limits in the case of re-sale during a specific period, in order to protect affordability for future buyers. Once purchased, the homes are fully under the responsibility of their buyers.
- Section 8, a federal subsidy in the form of a voucher held by a household. The voucher allows the renter to pay only up to 30% of his or her gross income; the remainder of the rent is paid to the landlord by the federal Section 8 program.
- Private housing that is affordable due to market conditions or rental apartments with rents kept affordable by the owner.
What factors determine affordable housing eligibility?
- Household Income Level
- The Area Median Income (AMI) of a given region (midway point between wealthiest and poorest)
- Individuals with incomes below 30% of AMI are considered to be “extremely low income”
- Individuals with incomes below 50% of AMI are considered to be “very low income”
- Individuals with incomes between 50% and 80% of AMI are considered to be “low income”
- Household size
- The type of affordable housing available and its source of funding
- Whether the household includes a qualified senior citizen or the permanently disabled
The Quality of Affordable Housing
Affordable housing must comply with the same building restrictions and design standards as market-rate housing. Builders know that it makes sense to use the same construction techniques and materials for all units in a development.
Furthermore, because affordable housing is often funded in part with public money, it must usually comply with additional restrictions and higher standards than market-rate housing.
Affordable housing is not affordable because it’s built with “sub-quality” materials; it is affordable in the sense that it is less costly to live in because it is supported by additional public and private funds.
Here in Boston and surrounding communities
The 2011 AMI for a family of four in the Greater Boston metropolitan area is $89,500. That means:
Affordable Housing is targeted for families and individuals of certain incomes
- To purchase an affordable home, first time buyers consisting of a family of four, often would be required to earn no more than $71,600 (80% of AMI)
- Eligibility for many affordable apartments requires an income equal to or less than 60% of the region’s AMI. In Boston, a family of four would need to earn less than $53,700 for consideration.
- Some affordable housing is targeted to households at 30% and below of the AMI
- Click here to find your area’s AMI levels*
*Actual median income in the city of Boston is much lower than the HUD-determined Area Median Income because the AMI averages incomes in more than 100 towns & cities in the Greater Boston area, including wealthy suburbs.
Examples of Affordable Housing in Boston
- Jamaica Plain Neighborhood Development Corporation
- Urban Edge Housing Corporation
- Davis Square Architects
- Tent City
- Langham Court, South End
- Massachusetts Association of CDCs