The term "affordable housing" is not quantitatively defined. One would expect that "affordable housing" would be a price point. Say $400/month. Then all rental units that cost $400 or less could call their rental "affordable housing." However, the reality is that to be counted as "affordable housing" one must sign a government commitment to provide affordable housing to families of a certain income. This commitment comes into play when you receive a low interest loan or a grant.
The income levels an owner can sign up for vary from program to program. Most commonly, the income levels are based off HUD's "area Median Income" (AMI). The AMI for Ramsey and Hennepin is $75,300 for a family of 4 (1). Therefore, affordable housing usually takes on commitments to provide housing at one of the following price points: % of AMI Annual income Affordable rent 80% $60,240 $1,506 50% $37,650 $ 941 30% $22,590 $ 564 There are programs available that offer government subsidies to build "affordable housing" targeting a family that makes 80% of the AMI -- or $60,240 per year. This "affordable housing" cannot exceed $1,506 per month for rent (or mortgage if it is a for sale property). Therefore, it is a reality that some of today's "affordable housing" could cost as much as $1,506 per month while the average market rate rent for an apartment in the metro area is $945 per month (2). I call this "the big lie." Most people have the impression that affordable housing is always inexpensive and market rate housing is always expensive. Please don't think I am anti "affordable housing." I am not. We must make housing affordable for everyone. It is not an option to be homeless (especially in Minnesota). The question we should all be asking is: As a society, we have paid a significant amount to affordable housing providers over the past decade. Today we have an oversupply of housing and increasing homelessness (2). Is it possible that our solutions are missing the target? What we should do is: a) Increase the social services available. A significant percentage of the homeless have serious personal challenges. b) Offer rent subsidies to those that do not make enough to afford the median rental ($945 today). This makes most market rate housing affordable to all income levels. The subsidy might have to increase for larger families (which need larger homes). c) Those that can afford the median rental are on their own. We should not subsidize housing for those that make $60,240 a year. Maybe we could offer low down mortgages to buy a home? d) If a housing shortage exists, the government should focus it's resources on families that make 30% or less of the AMI. e) Take a hard look at our building standards that needlessly push up the cost of housing. I hope this post is informative. Regards, Bill Cullen Whittier Landlord (1) http://www.efanniemae.com/hcd/single_family/ref_tools_info/hud_median_inc_li mits.jhtml (2) http://www.startribune.com/stories/362/4319869.html REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
