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Affordable housing is housing which is deemed affordable to those with a
household income Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food s ...
at or below the
median In statistics and probability theory, the median is the value separating the higher half from the lower half of a data sample, a population, or a probability distribution. For a data set, it may be thought of as "the middle" value. The basic f ...
as rated by the national government or a
local government Local government is a generic term for the lowest tiers of public administration within a particular sovereign state. This particular usage of the word government refers specifically to a level of administration that is both geographically-loc ...
by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency
homeless shelter Homeless shelters are a type of homeless service agency which provide temporary residence for homeless individuals and families. Shelters exist to provide residents with safety and protection from exposure to the weather while simultaneously re ...
s, to
transitional housing Transitional housing is temporary housing for certain segments of the homeless population, including working homeless people who are earning too little money to afford long-term housing. Transitional housing is set up to transition residents into ...
, to non-market
rental Renting, also known as hiring or letting, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for ...
(also known as
social Social organisms, including human(s), live collectively in interacting populations. This interaction is considered social whether they are aware of it or not, and whether the exchange is voluntary or not. Etymology The word "social" derives from ...
or
subsidized housing Subsidized housing is government sponsored economic assistance aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housin ...
), to formal and informal rental, indigenous housing, and ending with affordable home ownership. Housing choice is a response to an extremely complex set of economic, social, and psychological impulses. For example, some households may choose to spend more on housing because they feel they can afford to, while others may not have a choice.


Definition and measurement

There are several means of defining and measuring affordable housing. The definition and measurement may change in different nations, cities, or for specific policy goals.


Definitions

The definition of affordable housing may change depending on the country and context. For example, in Australia, the National Affordable Housing Summit Group developed their definition of affordable housing as housing that is "...reasonably adequate in standard and location for lower or middle income households and does not cost so much that a household is unlikely to be able to meet other basic needs on a sustainable basis.""Definition: Affordable Housing"
, ''Queensland Affordable Housing Consortium'', Australia
Affordable housing in the United Kingdom includes "social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market." In some contexts, affordable housing may only mean subsidized or public housing whereas in other cases it may include naturally occurring affordable housing or "affordable" by different incomes levels from no income households to moderate income but cost-burdened households.


Median multiple approaches

The median multiple indicator, recommended by the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inter ...
and the United Nations, rates affordability of housing by dividing the median house price by gross (before tax) annual median household income).
A common measure of community-wide affordability is the number of homes that a household with a certain percentage of
median income The median income is the income amount that divides a population into two equal groups, half having an income above that amount, and half having an income below that amount. It may differ from the mean (or average) income. Both of these are ways o ...
can afford. For example, in a perfectly balanced housing market, the median household (the wealthier half of households) could officially afford the median housing option, while those poorer than the median income could not afford the median home. 50% affordability for the median home indicates a balanced market.
Some countries look at those living in
relative poverty The poverty threshold, poverty limit, poverty line or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for ...
, which is usually defined as making less than 60% of the
median household income The median income is the income amount that divides a population into two equal groups, half having an income above that amount, and half having an income below that amount. It may differ from the mean (or average) income. Both of these are ways o ...
. In their policy reports, they consider the presence or absence of housing for people making 60% of the median income.


Housing costs as percentage of gross income

Determining housing affordability is complex and the commonly used housing-expenditure-to-income-ratio tool has been challenged. In the United States and Canada, a commonly accepted guideline for housing affordability is a housing cost, including utilities, that does not exceed 30% of a household's gross income. Some definitions include maintenance costs as part of housing costs. Canada, for example, switched to a 25% rule from a 20% rule in the 1950s. In the 1980s this was replaced by a 30% rule. India uses a 40% rule.


Housing affordability index approaches

There are several types of housing affordability indexes that take a number of factors, not just income, into account when measuring housing affordability. The American
National Association of Realtors The National Association of Realtors (NAR) is an American trade association for those who work in the real estate industry. It has over 1.4 million members, making it one of the biggest trade associations in the USA including NAR's institutes, so ...
and other groups measure market housing through a housing affordability index which measures whether or not a typical family could qualify for a mortgage loan on a typical home. This index calculates affordability based on the national median-priced single family home, the typical family median income, and the prevailing mortgage interest rate to determine if the median income family can qualify for a mortgage on a typical home. To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index over 100 signifies that family earning the median income has more than enough income for a mortgage loan on the median-priced home (assuming they have a 20 percent down payment). For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI shows that this family is more able to afford the median-priced home. The
Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a Private university, private Land-grant university, land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern t ...
(MIT) developed a housing affordability index that attempts to capture the total cost of housing by several factors include employment accessibility, amenities, transportation costs and transit access, quality of schools, etc. In computing the index the obvious cost of rents and mortgage payments are modified by the hidden costs of those choices. Other groups have also created amenity based housing affordability indexes. The Center for Neighborhood Technology developed the Housing + Transportation (H+T) Affordability Index provides a comprehensive view of affordability that includes both the cost of housing and the cost of transportation at the neighborhood level. CNT notes that the 30% of household income affordability measurementment results in little over half (55%) of U.S. neighborhoods being considered “affordable” for the typical household. They note that such a measurement fails to take into account transportation costs (such as multiple cars, gas, maintenance), which are usually a household’s second-largest expenditure. When transportation costs are factored into the measurement, the number of affordable neighborhoods nationally drops to 26%, resulting in a net loss of 59,768 neighborhoods that Americans can truly afford. Per CNT's measurement, people who live in location-efficient neighborhoods that are compact, mixed-use, and have convenient access to jobs, services, transit and amenities tend to have lower transportation costs.


Household income and wealth approaches

Some analysts believe income is the primary factornot price and availability, that determines housing affordability. In a market economy the distribution of income is the key determinant of the quantity and quality of housing obtained. Therefore, understanding affordable housing challenges requires understanding trends and disparities in income and wealth. Housing is often the single biggest expenditure of low and middle income families. For low and middle income families, their house is also the greatest source of wealth. Another method of studying affordability looks at the regular hourly wage of full-time workers who are paid only the minimum wage (as set by their local, regional, or national government). This methods attempts to determine if workers at that income can afford adequate housing.


Differing parameters and limitations in approaches

Each method of measuring or defining affordable housing has some weaknesses or limitations. Some organizations and agencies consider the cost of purchasing a single-family home; others look exclusively at the cost of renting an apartment. Many U.S. studies, for example, focus primarily on the median cost of renting a two-bedroom apartment in a large apartment complex for a new tenant. These studies often lump together luxury apartments and slums, as well as desirable and undesirable neighborhoods. While this practice is known to distort the true costs, it is difficult to provide accurate information for the wide variety of situations without the report being unwieldy. Often, only legal, permitted, separate housing is considered when calculating the cost of housing. The low rent costs for a room in a single family home, or an illegal garage conversion, or a college dormitory are generally excluded from the calculation, no matter how many people in an area live in such situations. Because of this study methodology, median housing costs tend to be slightly inflated. Costs are generally considered on a cash (not
accrual Accrual (''accumulation'') of something is, in finance, the adding together of interest or different investments over a period of time. Accruals in accounting For example, a company delivers a product to a customer who will pay for it 30 days ...
) basis. Thus a person making the last payment on a large home mortgage might live in officially unaffordable housing one month, and very affordable housing the following month, when the mortgage is paid off. This distortion can be significant in areas where real estate costs are high, even if incomes are similarly high, because a high income allows a higher proportion of the income to be dedicated towards buying an expensive home without endangering the household's ability to buy food or other basic necessities.


Economics


Causes and consequences of rises in housing prices

Costs are being driven by a number of factors including: * demographic shifts ** the declining number of people per dwelling ** growing density convergence and regional urbanization ** solid population growth (for example high prices in Australia and Canada as a rising population pushes up demand) * supply and demand ** a shortfall in the number of dwellings to the number of households *** smaller family size *** strong psychological desire for home ownership * shifts in economic policies and innovations in financial instruments ** reduced profitability of other forms of investment ** ongoing gains in unimproved value of land, which is untaxed for residential land ** availability of housing finance ** low interest rates ** mortgage market innovations * public policy ** regulation ** land use
zoning Zoning is a method of urban planning in which a municipality or other tier of government divides land into areas called zones, each of which has a set of regulations for new development that differs from other zones. Zones may be defined for a s ...
** significant taxes, levies and fees by government on new housing (especially in Australia)


Supply and demand

In some countries, the market has been unable to meet the growing demand to supply housing stock at affordable prices. Although demand for affordable housing, particularly rental housing that is affordable for low and middle income earners, has increased, the supply has not. Potential home buyers are forced to turn to the rental market, which is also under pressure. An inadequate supply of housing stock increases demand on the private and social rented sector, and in worse case scenarios, homelessness.


Factors that affect supply and demand of housing stock

* Demographic and behavioral factors * Migration (to cities and potential employment) * Increased life expectancy * Building codes * A greater propensity for people to live alone * Young adults delaying forming their own household (in advanced economies) * Exclusionary zoning


Factors that affect tenure choices (ex. owner occupier, private rented, social rented)

* Employment rates ** Rising unemployment rates increase demand for market rentals, social housing and homelessness. * Real household incomes ** Household incomes have not kept up with rising housing prices * Affordability of rents and owner occupation * Interest rates * Availability of mortgages * Levels of confidence in the economy and housing market ** Low confidence decreases demand for owner occupation.


Inequality and housing

A number of researchers argue that a shortage of affordable housing – at least in the US – is caused in part by income inequality. David Rodda noted that from 1984 and 1991, the number of quality rental units decreased as the demand for higher quality housing increased. Through
gentrification Gentrification is the process of changing the character of a neighborhood through the influx of more affluent residents and businesses. It is a common and controversial topic in urban politics and planning. Gentrification often increases the eco ...
of older neighbourhoods, for example, in East New York, rental prices increased rapidly as landlords found new residents willing to pay higher market rate for housing and left lower income families without rental units. The ad valorem property tax policy combined with rising prices made it difficult or impossible for low income residents to keep pace. Lack of affordable housing places a particular burden on local economies. As well, individual consumers are faced with mortgage arrears and excessive debt and therefore cut back on consumption. A combination of high housing costs and high debt levels contributes to a reduction in savings. These factors can lead to decreased investment in sectors that are essential to the long-term growth of the economy. The geographic distribution of affordable housing and its respective restrictions provides a disproportionate distribution of benefits to certain economic groups. Research has found that cities are more likely to have zoning restrictions, which effectively limits the expansion of affordable housing units in these areas. These zoning restrictions increase in housing prices, forcing the housing developers who create subsidized housing to look towards other options. Zoning restrictions drive low-income families to live in neighborhoods with reduced opportunities, restricting access to metropolitan economies. These patterns of zoning ultimately force the income divide between different socioeconomic groups to widen by creating enclaves of low-income and wealthy neighborhoods. These enclaves dictate the distribution of labor, causing a geographical distribution of industries that disproportionately exclude low-income residents from lucrative industries.


Affordable Housing and Urbanization


Urbanization

As the world's population continues to increase (expected to reach 9 billion by mid century), more and more people are inhabiting cities for the benefits of industrialization. Those benefits include employment opportunities and better living conditions with access to infrastructure, education, healthcare, and recreation. This process is referred to as urbanization. World Bank reports that by 2050 nearly 7 of 10 people in the world will live in cities. This kind of growth however brings challenges to urban development as cities are tasked with efficiently utilizing resources in accordance with the global demand for affordable housing.


The Urban Poor and Homeless

Globally, it is estimated that 1.6 billion people live in inadequate housing conditions. The majority of that population live in " urban slums" which are highly populated, impoverished residential areas consisting of densely packed housing that lack proper shelter and basic necessities such as clean water, food, hygiene facilities, and electricity. Slums typically form in developing countries as populations migrate from rural to urban areas searching for employment and better living conditions. But due to the higher prices of urban living and a range of other factors such as economic stagnation, migrators find themselves forced to relocate to such slums. The largest slum in the world is Neza-Chalco-Itza in Mexico, housing almost four million people. According to estimates, by 2030 1 in 4 people on the planet will live in a slum or other informal settlement. Meanwhile, there are approximately 140 million people worldwide who are homeless, usually as a result of being evicted from slums. Since slum residents don't own a title or lease to property, they are often evicted from their home by someone with a claim to the land and left without one. The same principle is applied in the United States as people who are unable to afford their mortgage or rent are evicted and left homeless.


The State of Homelessness in America

In September 2019, the Council of Economic Advisers from the Executive Office of the President of the United States published the report: The State of Homelessness in America. The report found that " er half a million people go homeless on a single night in the United States" with approximately 65% or 350,000 people living in homeless shelters and 35% - just under 200,000 people - are unsheltered in the streets (living on sidewalks or in parks, cars, or abandoned buildings).The Council of Economic Advisers: The State of Homelessness in America. September 2019. Executive Office of the President of the United States. Almost half (47%) of all unsheltered homeless people are found in the state of California. Rates of sheltered homelessness are highest in Boston, New York City, Washington D.C. with NYC alone containing over one-fifth of all sheltered people in the U.S. In a framework of
supply and demand In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor ...
the report analyzes the major factors that causes the variation in homelessness across communities. Considering the four major drivers of homeless populations: (i) the higher price of housing resulting from overregulation of housing markets; (ii) the tolerability of sleeping on the street (outside of shelter or housing); (iii) the supply of homeless shelters; and (iv) the characteristics of individuals in a community that make homelessness more likely, the report concludes with federal policies and programs aimed at reducing homelessness. The first factor contributing to an increase in homelessness is the higher price of housing resulting from the overregulation of housing markets. As stated in President Trump’s Executive Order Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing, such regulations include: “overly restrictive zoning and growth management controls; rent controls; cumbersome building and rehabilitation codes; excessive energy and water efficiency mandates; unreasonable maximum-density allowances; historic preservation requirements; overly burdensome wetland or environmental regulations; outdated manufactured-housing regulations and restrictions; undue parking requirements; cumbersome and time-consuming permitting and review procedures; tax policies that discourage investment or reinvestment; overly complex labor requirements; and inordinate impact or developer fees.” These regulations reduce the supply of housing and as a result increase the price of a home. Given the relationship between higher home prices and homelessness, the report simulated the impact of deregulation on housing in individual metropolitan areas. It showed that if 11 metropolitan areas with significantly supply constrained housing were deregulated, homelessness would fall by 54 percent in San Francisco, by 50 percent in Honolulu, by 40 percent in Oxnard and Los Angeles, by 38 percent in San Diego, by 36 percent in Washington, D.C., and by between 19 and 26 percent in Boston, Denver, New York, Seattle and Baltimore. The second factor the report provides is the tolerability of sleeping on the street (outside of shelter or housing). Studies show that cities with warmer climates have significantly higher rates of unsheltered homelessness compared to cities with cold climates. The homeless are more accepting of unsheltered living in areas with warmer conditions, hence why Los Angeles and San Diego have some of the highest unsheltered rates. The third factor that explains variation in homelessness is the supply of substitutes to housing through homeless shelters. "Some places, including New York City, the State of Massachusetts, and the District of Columbia – provide a legal “right to shelter” that promises shelter of some minimum level of quality". This means that regardless of occupancy, the shelter ensures a certain level of quality. "Thus, as long as the minimum shelter quality is set high enough (i.e., higher than equilibrium quality levels reached in other places), we would expect right-to-shelter places to have a larger supply of homeless shelters." Since a larger shelter supply entails a higher shelter quality, people who otherwise wouldn't be homeless are found living in shelters because they provide a better alternative. This results in a decrease in the demand for housing and an increase in homelessness. The fourth and final cause of homelessness is a higher prevalence of individual-level risk factors. These factors include mental health, substance abuse, incarceration, poverty, and social ties. "According to the 2018 homeless point-in-time count, 111,122 homeless people (20 percent) had a severe mental illness and 86,647 homeless people (16 percent) suffered from chronic substance abuse. Among all adults who used shelter at some point in 2017, 44 percent had a disability." In addition, "people experiencing homelessness generally have low incomes and relatively weaker social ties." While the vast majority of people with these issues are not homeless, there is a strong connection to those who are. The Federal Government provides funding to communities to support homeless assistance programs. The Department of Housing and Urban Development (HUD) is the largest source of Federal funds, providing $2.6 billion combined via the Continuum of Care (CoC) program and Emergency Solution Grant program alone in 2019. These two programs support competitive funding to communities for homeless outreach, emergency shelter, transitional housing, rapid rehousing, permanent supportive housing and homelessness prevention. The U.S. Department of Veterans Affairs (VA) provides $1.8 billion for programs that serve homeless veterans, in addition to funding from HUD targeted specifically to homeless veterans. Other smaller sources of funding include the U.S. Department of Health and Human Services, the U.S. Department of Education, and the U.S. Department of Labor. State and local governments and private philanthropy provide substantial funding and support for homeless assistance as well. The Trump Administration implemented a range of policies in conjunction with homeless assistance programs in addressing the four major drivers of homelessness. Most significant was the reformation of the Housing First approach which provides competitive funding to CoC's. While the program maintains a commitment to providing housing with no preconditions to program participants, the 2019 Notice of Funding Availability allowed communities flexibility to impose service participation requirements for participants after they have been stabilized in housing. Such reforms allow homeless assistance programs help vulnerable homeless individuals become self-sufficient through employment and earning an income.


Affordable housing and urbanization

The majority of the more than seven billion people on earth now live in urban areas. There are more than 500 city regions of more than one million inhabitants in the world. Cities become megacities become megalopolitan city regions and even "galaxies" of more than 60 million inhabitants. The Yangtze Delta-Greater Shanghai region now surpasses 80 million. Tokyo-Yokohama adjacent to Osaka-Kobe-Kyoto have a combined population of 100 million. Rapid population growth leads to increased need for affordable housing in many cities. The availability of affordable housing in proximity of mass transit and linked to job distribution has become severely imbalanced in this period of rapid regional urbanization and growing density convergence.


Social and environmental impacts

Housing affordability is more than just a personal trouble experienced by individual households who cannot easily find a place to live.The Housing of Good Intentions: The Naya Pakistan Housing Program.
Housing & Community Development Law eJournal. Social Science Research Network (SSRN). Accessed 31 January 2020.
Lack of affordable housing is considered by many urban planners to have negative effects on a community's overall health.


Labour market performance and transportation

Lack of affordable housing can make low-cost labor more scarce, and increase demands on transportation systems (as workers travel longer distances between jobs and affordable housing). "Faced with few affordable options, many people attempt to find less expensive housing by buying or renting farther out from their place of employment, but long commutes often result in higher transportation costs that erase any savings on shelter." This has been called the "drive 'til you qualify" approach, which causes far-flung development and forces people to drive longer distances to get to work, to get groceries, to take children to school, or to engage in other activities. A well located dwelling might save significant household travel costs and therefore improve overall family economics, even if the rent is higher than a dwelling in a poorer location. In both large metropolitan areas and regional towns where housing prices are high, a lack of affordable housing places local firms at a competitive disadvantage. They are placed under wage pressures as they attempt to decrease the income/housing price gap. Key workers have fewer housing choices if prices rise to non-affordable levels. Variations in affordability of housing between areas may create labour market impediments. Potential workers are discouraged from moving to employment in areas of less affordability. They are also discouraged from migrating to areas of high affordability as the low house prices and rents indicate low capital gain potential and poor employment prospects. Lack of affordable housing can make low-cost labour scarcer (as workers travel longer distances).


Public Health and Education

"In addition to the distress it causes families who cannot find a place to live, lack of affordable housing is considered by many urban planners to have negative effects on a community's overall health." Improving thermal comfort at home especially for houses without adequate warmth and for tenants with chronic respiratory disease may lead to improved health and promote social relationships. Housing cost increases in American cities have been linked to declines in enrollment at local schools. The
American Journal of Public Health The ''American Journal of Public Health'' is a monthly peer-reviewed public health journal published by the American Public Health Association that covers health policy and public health. The journal was established in 1911 and its stated missi ...
recognizes homelessness as a public health issue. In a 2013 survey, a lack of affordable housing was the number one in the list of causes of homelessness amongst families with children and unaccompanied individuals. Studies through the Canadian Journal of Psychiatry have shown that access to rapid permanent housing with treatment, rehabilitation, and support services have led to a decrease in Shelter and emergency department costs. Affordable Housing is found to reduce the likelihood that a family will be forced to move due to financial challenges such as eviction, foreclosure, or rent increase. A study focusing on the effects of foreclosure on student academic performance within the Boston public school system, found a relationship that suggests foreclosures have a small negative association with individual students' test score and attendance, controlling for the student's previous test score or attendance. A 1996 technical report also found that teachers that teach students that have had to move with a high frequency have had to include a reduction in instructional pacing and more review in order to accommodate variation and uncertainty in student learning.


Affordable Housing and Sustainability

A new subsection of affordable housing has emerged: sustainable affordable housing. Many researchers have contributed to this subsection, discovering innovative methods to make affordable housing less environmentally detrimental. One method emphasized is creating disaster-resistant affordable housing units to reduce the impact of climate change-related natural disasters. This method includes using weather-resistant housing materials and placing affordable housing units in disaster-resistant geographical locations. Another method is creating new standards for affordable housing developments such as energy efficiency and location efficiency. A study by Albert Chan and Michael Adabre on the relationship between sustainable housing and affordable housing found that setting standards for energy and location would help reduce environmental stressors like greenhouse gas emissions. Improving the sustainability of affordable housing units is found to provide benefits such as reductions in energy costs, an increase in the economic value of sustainable housing, and increased comfort for sustainable housing residents.


Home values

According to a 2022 study, LIHTC projects in the United States increase land value in surrounding neighborhoods.


Affordable housing and public policy


Background

Policy makers at all levels – global, national, regional, municipal, community associations – are attempting to respond to the issue of affordable housing, a highly complex crisis of global proportions, with a myriad of policy instruments. These responses range from stop-gap financing tools to long-term intergovernmental infrastructural changes. There has been an increase among policy makers in affordable housing as the price of housing has increased dramatically creating a crisis in affordable housing. Additionally, the process of weighing the impacts of locating affordable housing is quite contentious and may have race and class implications. Affordable housing policy has political, philosophical, and ethical elements. In the simplest of terms, affordability of housing refers to the amount of capital one has available in relation to the price of the goods to be obtained. Public policies are informed by underlying assumptions about the nature of housing itself. Is housing a basic need, a right, an entitlement, or a public good? Or is it just another household-level consumer choice, a commodity or an investment within the free market system? "Housing Policies provide a remarkable litmus test for the values of politicians at every level of office and of the varied communities that influence them. Often this test measures simply the warmth or coldness of heart of the more affluent and secure towards families of a lower socio-economic status." To combat
slum A slum is a highly populated urban residential area consisting of densely packed housing units of weak build quality and often associated with poverty. The infrastructure in slums is often deteriorated or incomplete, and they are primarily inh ...
s,
homelessness Homelessness or houselessness – also known as a state of being unhoused or unsheltered – is the condition of lacking stable, safe, and adequate housing. People can be categorized as homeless if they are: * living on the streets, also k ...
, and other social and economic impacts of a housing unaffordability, many groups have argued for a "
right to housing The right to housing (occasionally right to shelter) is the economic, social and cultural right to adequate housing and shelter. It is recognized in some national constitutions and in the Universal Declaration of Human Rights and Internation ...
". Article 25 of the
Universal Declaration of Human Rights The Universal Declaration of Human Rights (UDHR) is an international document adopted by the United Nations General Assembly that enshrines the rights and freedoms of all human beings. Drafted by a UN committee chaired by Eleanor Roosevelt, ...
recognizes the right to housing as part of the
right to an adequate standard of living The right to an adequate standard of living is a fundamental human right. It is part of the Universal Declaration of Human Rights that was accepted by the General Assembly of the United Nations on December 10, 1948.United Nations''Universal Decla ...
. Article 11(1) of the
International Covenant on Economic, Social and Cultural Rights The International Covenant on Economic, Social and Cultural Rights (ICESCR) is a multilateral treaty adopted by the United Nations General Assembly (GA) on 16 December 1966 through GA. Resolution 2200A (XXI), and came in force from 3 January 19 ...
(ICESCR) also guarantees the right to housing as part of the
right to an adequate standard of living The right to an adequate standard of living is a fundamental human right. It is part of the Universal Declaration of Human Rights that was accepted by the General Assembly of the United Nations on December 10, 1948.United Nations''Universal Decla ...
. Many housing rights groups also attempt to combat social and political issues which relate to access to quality affordable housing such as
housing discrimination Housing discrimination refers to patterns of discrimination that affect a person's ability to rent or buy housing. This disparate treatment of a person on the housing market can be based on group characteristics or on the place where a person liv ...
,
redlining In the United States, redlining is a discriminatory practice in which services ( financial and otherwise) are withheld from potential customers who reside in neighborhoods classified as "hazardous" to investment; these neighborhoods have sign ...
, and lack of access to amenities in areas with affordable housing including
food desert Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is inges ...
s and transit deserts.


Market-based approaches

One potential means of addressing affordable housing is through public policy instruments that focus on the demand side of the market, programs that help households reach financial benchmarks that make housing affordable. This can include approaches that simply promote economic growth in generalin the hope that a stronger economy, higher employment rates, and higher wages will increase the ability of households to acquire housing at market prices. Federal government policies define banking and mortgage lending practices, tax and regulatory measures affecting building materials, professional practices (ex. real estate transactions). The purchasing power of individual households can be enhanced through tax and fiscal policies that result in reducing the cost of mortgages and the cost of borrowing. Public policies may include the implementation of subsidy programs and incentive patterns for average households. For the most vulnerable groups, such as seniors, single-parent families, the disabled, etc. some form of publicly funded allowance strategy can be implemented providing individual households with adequate income to afford housing. Currently, policies that facilitate production on the supply side include favorable land use policies such as inclusionary zoning, relaxation of environmental regulations, and the enforcement of affordable housing quotas in new developments. In some countries, such as Canada and the United States, municipal governments began to play a greater role in developing and implementing policies regarding form and density of municipal housing in residential districts, as early as the 1950s. At the municipal level, promoted policy tools include zoning permissions for diverse housing types or missing middle housing types such as duplexes, cottages, rowhomes, fourplexes, and accessory dwelling units. Some municipalities have also reduced the amount of
parking Parking is the act of stopping and disengaging a vehicle and leaving it unoccupied. Parking on one or both sides of a road is often permitted, though sometimes with restrictions. Some buildings have parking facilities for use of the buildings' ...
that must be built for a new structure in order to reduce land acquisition and construction costs. Other common strategies include reducing permitting costs and wait times for new housing, permitting small-lot development, multi-family tax exemptions, density bonuses, preserving existing affordable housing, and transit-oriented development. Existing housing that is affordable may be used, instead of building new structures. This is called "Naturally Occurring Affordable Housing", or NOAH. In a
housing cooperative A housing cooperative, or housing co-op, is a legal entity, usually a cooperative or a corporation, which owns real estate, consisting of one or more residential buildings; it is one type of housing tenure. Housing cooperatives are a disti ...
people join on a democratic basis to own or manage the housing facility in which they live. Generally these housing units are owned and controlled collectively by a corporation which is owned and controlled jointly by a group of individuals who have equal shares in that corporation. In market rate cooperatives owners can accumulate equity and sell their share of the corporation at market rate. In a limited-equity housing cooperative there are restrictions on the profits members can earn from selling their share (such as caps on sale price) to meant to maintain affordable housing. Community land trusts are nonprofit corporation that holds land, housing, or other assets on behalf of a neighborhood or community. A community land trust acquires and maintains ownership of the land through a non-for-profit that holds the land in a trust. Homeowners then purchase or build a home on land trust property but do not purchase the land thus reducing costs. If the homeowner sells, they may be limited on what they may sell the home for or the family may earn only a portion of the increased property value with the remainder kept by the trust to preserve affordable housing There are over 225 community land trusts in the United States.


Right to build

An article by
libertarian Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's enc ...
writer
Virginia Postrel Virginia Inman Postrel (born January 14, 1960) is an American political and cultural writer of broadly libertarian, or classical liberal, views. She is a recipient of the Bastiat Prize (2011). Early life and education Virginia Inman was born ...
in the November 2007 issue of ''
Atlantic Monthly ''The Atlantic'' is an American magazine and multi-platform publisher. It features articles in the fields of politics, foreign affairs, business and the economy, culture and the arts, technology, and science. It was founded in 1857 in Boston, ...
'' reported on a study of the cost of obtaining the "right to build" (i.e. a building permit, red tape, bureaucracy, etc.) in different U.S. cities. The "right to build" cost does not include the cost of the land or the cost of constructing the house. The study was conducted by
Harvard Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of high ...
economists
Edward Glaeser Edward Ludwig Glaeser (born May 1, 1967) is an American economist and Fred and Eleanor Glimp Professor of Economics at Harvard University. He is also Director for the Cities Research Programme at the International Growth Centre. He was educated a ...
and Kristina Tobio. According to the chart accompanying the article, the cost of obtaining the "right to build" adds approximately $600,000 to the cost of each new house that is built in San Francisco. The study, cited, published by Ed Glaeser and Joseph Gyourko, reached its conclusion about the value of the right to build in different localities based on a methodology of comparing the cost of single-family homes on quarter-acre versus half-acre lots to get a marginal land price and then comparing the selling price of homes to construction costs to get a price for the land plus other costs, with the difference between the two being attributed to the cost of zoning and other local government permitting and regulations.


Government restrictions on affordable housing

Many governments put restrictions on the size or cost of a dwelling that people can live in, making it essentially illegal to live permanently in a house that is too small, low-cost or not compliant with other government-defined requirements. Generally, these laws are implemented in an attempt to raise the perceived "standard" of housing across the country. This can lead to thousands of houses across a country being left empty for much of the year even when there is a great need for more affordable housing; such is the case in countries like
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,
Norway Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and th ...
,
Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of Bot ...
and
Denmark ) , song = ( en, "King Christian stood by the lofty mast") , song_type = National and royal anthem , image_map = EU-Denmark.svg , map_caption = , subdivision_type = Sovereign state , subdivision_name = Danish Realm, Kingdom of Denmark ...
, where there is a common tradition to have a
summer house A summer house or summerhouse has traditionally referred to a building or shelter used for relaxation in warm weather. This would often take the form of a small, roofed building on the grounds of a larger one, but could also be built in a garden ...
. This sometimes raises concerns for the respect of rights such as the right to utilize one's property. In the United States, most cities have zoning codes that set the minimum size for a housing unit (often 400 square feet) as well as the number of non-related persons who can live together in one unit, resulting in having "outlawed the bottom end of the private housing market, driving up rents on everything above it." In
California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the mo ...
in 2021, researchers estimated that parking requirements increase the cost of building affordable housing by up to $36,000 per unit, and up to $75,000 per unit in cities like
Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the List of municipalities in California, largest city in the U.S. state, state of California and the List of United States cities by population, sec ...
and
San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17t ...
. Until 2018, in Los Angeles, for an affordable housing development to be allowed to be built, it required a "letter of acknowledgement" from the city councilperson in whose district it would be constructed. This allowed city council members to block affordable housing developments in their district without having to give any reason.


Subsidy-based approaches

Subsidized housing is government or non-for-profit sponsored economic assistance aimed towards alleviating housing costs and expenses, generally for people with low to moderate incomes. Subsidy-based approaches may take the form of government sponsored rental subsidies, government sponsored rental supplements, tax credits, or housing provided by a non-for-profit. In a mutual-aid housing cooperative, a group of families forms a cooperative to collectively build, own, and manage land by participating in the process of constructing the housing for the cooperative. Each family is responsible for contributing labor towards the construction of the housing complex to reduce costs and members take on responsibilities before, during, and after the construction. The Uruguayan Federation of Mutual Aid Housing Cooperatives (FUCVAM) has completed nearly 500 housing cooperatives housing more than 25,000 families.


Public, state, or social housing approaches

Public housing is a form of housing tenure in which the property is usually built and owned by a government authority, either central or local. In some countries, public housing is focused on providing affordable housing for low-income earners while in others, such as
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bo ...
, citizens across a wide range of incomes live in public housing. In Vienna, Austria, social housing may be completely government built and run or include a mixture of public land and private-sector construction and management. Combined, the two types of housing represent about 46 percent of the city’s housing stock (26% government owned and managed and 20% a public/private partnership) and house people with a wide variety of incomes. In South Korea the public Korea Land & Housing Corporation has provided homes to 2.9 million households which is 15% of the national total of 19.56 million households. This includes 2.7 million newly-built public housing units and 1.03 million rental homes of which 260,000 were purchased or rented by the Land and Housing Corporation.


Reefer container housing units

Reefer containers or
refrigerated container A refrigerated container or reefer is an intermodal container (shipping container) used in intermodal freight transport that is capable of refrigeration for the transportation of temperature-sensitive, perishable cargo such as fruits, vegetabl ...
s are
containers A container is any receptacle or enclosure for holding a product used in storage, packaging, and transportation, including shipping. Things kept inside of a container are protected on several sides by being inside of its structure. The term ...
built to haul refrigerated or frozen products. These containers can be repurposed for container housing or prefabricated for housing purposes. The advantage is the insulation in the walls, ceiling, and floor compared to corrugated metal in standard shipping containers that can get very hot or cold from the weather outside.
Prefabricated Prefabrication is the practice of assembling components of a structure in a factory or other manufacturing site, and transporting complete assemblies or sub-assemblies to the construction site where the structure is to be located. The term is u ...
reefer containers with the wiring ran through the walls and the plumbing ran through the ceiling and floor before the insulation, interior walls, and floors are installed would be more practical than trying to do that with a repurposed used reefer container.


Affordable housing by country

Different countries and cities throughout the world have found unique ways to respond to the need for affordable housing. In some provinces within China, for example, local governments have instituted "tradable land quotas." These quotas allow developers to construct new housing units at the outer bounds of the city limits, and, in return, land outside of the city is protected from development. On the other hand, in Los Angeles, the city government recently instituted legislation that allows motels to be transformed into affordable housing units, regardless of zoning regulations. In Brussels, an architectural firm was able to repurpose a soap factory, creating affordable housing units that included 1-6 bedroom apartments, studios, lofts, and duplexes. These residential units are also energy-efficient, so have both social and environmental benefit. While innovative building practices have been incredibly successful in countries such as Nigeria and India, cities in more developed countries have found unique ways to increase affordable housing in dense urban areas through partnerships with private developers. For example, in Germany, cities including Berlin and Hamburg have established partnerships with private developers to construct new affordable housing units. In a 2011 agreement, developers in Hamburg agreed to build 3500 new housing units per year and 30% of these units would only be available to low and middle income households. To support the developer's work, Hamburg's city government agreed to provide city-owned land and acquire privately-owned land on which the units would be constructed. Additionally, Hamburg modified urban planning regulations in locations occupied predominantly by low-income individuals to simplify the process of affordable housing construction. On the other hand, in Berlin, the Alliance for Housing Construction, which was established in 2014, brought together Berlin's local government, private landlords, and public utility landlords to make rental units in the city more affordable. Public utility landlords such as non profit organizations agreed to build 3000 new dwellings each year. Between 300 and 1000 of these units would be provided as "non-serviced rents." Additionally, private landlords agreed to construct 6000 units each year, and between 600 and 1200 of these units would be provided as "non-serviced rents."


Notable people

* Trudy McFall, 1994 co-founder and Chairman of "Homes for America"


See also

*
Public housing Public housing is a form of housing tenure in which the property is usually owned by a government authority, either central or local. Although the common goal of public housing is to provide affordable housing, the details, terminology, de ...
*
Subsidized housing Subsidized housing is government sponsored economic assistance aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housin ...
*
Subsidized housing in the United States In the United States, subsidized housing is administered by federal, state and local agencies to provide subsidized rental assistance for low-income households. Public housing is priced much below the market rate, allowing people to live in m ...
* Section 8 *
Sídlisko Sídlisko is a term used in Slovak () which mainly means housing estate. Other terms associated with this term are housing project, housing estate, settlement, or neighbourhood. In these housing projects, apartment buildings are built in the ...
* Panelák *
Housing estate A housing estate (or sometimes housing complex or housing development) is a group of homes and other buildings built together as a single development. The exact form may vary from country to country. Popular throughout the United States ...
*
Alternative housing Alternative housing is a category of domicile structures that are built or designed outside of the mainstream norm e.g., town homes, single family homes and apartment complexes. In modern days, alternative housing commonly takes the form of tin ...
* Beach hut *
Cottage A cottage, during Feudalism in England, England's feudal period, was the holding by a cottager (known as a cotter or ''bordar'') of a small house with enough garden to feed a family and in return for the cottage, the cottager had to provide ...
* Friggebod * Housing gap *
Illegal housing Illegal construction (also known as illegal building or illegal housing) is construction work (or the result of such) without a valid construction permit. Besides the potential technical hazards on uncontrolled construction sites and in finished ...
* Informal housing *
Mobile home A mobile home (also known as a house trailer, park home, trailer, or trailer home) is a prefabricated structure, built in a factory on a permanently attached chassis before being transported to site (either by being towed or on a trailer). U ...
*
Modular building A modular building is a prefabricated building that consists of repeated sections called modules. Modularity involves constructing sections away from the building site, then delivering them to the intended site. Installation of the prefabricated ...
*
Non-profit housing Non-profit housing developers build affordable housing for individuals under-served by the private market. The non-profit housing sector is composed of community development corporations (CDC) and national and regional non-profit housing organi ...
*
Recreational vehicles A recreational vehicle, often abbreviated as RV, is a motor vehicle or trailer that includes living quarters designed for accommodation. Types of RVs include motorhomes, campervans, coaches, caravans (also known as travel trailers and campe ...
*
Shipping container architecture Shipping container architecture is a form of architecture using steel intermodal containers ( shipping containers) as the main structural element. It is also referred to as cargotecture, a portmanteau of cargo with architecture, or "arkitai ...
* Single-room occupancy * Tiny house movement


References

{{DEFAULTSORT:Affordable Housing Urban, rural, and regional economics Economic inequality