Affordable housing is defined as that which costs no more than 30% of a family's gross monthly income for rent and utilities. Costs for mortgage, utility, taxes, interest, and insurance should be no more than 38% of one's gross monthly income for housing ownership to be considered affordable. At any level of income, housing can be affordable or unaffordable according to this definition. Issues of housing affordability are thus a matter of comparing the costs of available housing in an area with the incomes of the population of that area. In the case of housing, good policy would be that which produces housing priced in the range of affordability for the area population. Generally, affordable housing programs target "low" or "very low" income individuals and families. According to the U.S. Department of Housing and Urban Development (HUD), low income persons earn less than 80% of an area's median income. Very low income persons earn 50% or less of an area's median income.

Subsidized housing rental payments are reduced as a result of assistance provided by government, private enterprises, or individuals. Tenants pay less than the market rate for rent or for rent and services. Affordable Housing is generally defined as housing which the occupant is paying no more than 30 percent of gross income for housing costs, as defined by the US Department of Housing and Urban Development (HUD). Affordable housing provides residents with low cost housing for sale or rent. This form of housing is often provided by a housing agency to meet the needs of local people who cannot afford accommodations through the open or low-cost market, or subsidized housing.

More people than you might realize. The economic expansion of the 1990s obscured certain trends and statistics that point to an increased, not decreased, need for affordable housing. The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation, and medical care. An estimated 12 million renter and homeowner households now pay more then 50 percent of their annual incomes for housing, and a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs, such as nutrition and healthcare, or saving for their future and that of their families.

Everyone deserves affordable housing. However, as the cost of housing rises, many of us are forced to pay more than we can really afford. Not only are people who are caught in or have slipped through the social safety net hurt but so are many others. People you rely on all the time - teachers, bank tellers, police officers, waiters, fast food clerks, dry cleaner employees, secretaries, nurses, firefighters, and even many young professionals - may need assistance with housing. Someone we know or people just like us - a relative or friend - may be impacted by the scarcity or cost of housing. Rising housing costs are a concern for everyone for the following reasons:

Economic Reasons

• Over the last 10 years, the largest job growth occurred in the service and retail trade sectors. Service, retail trade, and agriculture jobs on average pay much lower than other job sectors.
• Over the last 10 years, housing costs have significantly outpaced the increase in wages.
• Companies in the area rely on a mix of workers earning different levels of income. Without these workers, the companies could not afford to operate and would have to move elsewhere.
• People who cannot afford local housing costs are forced to commute from outlying communities which (1) exacerbates traffic congestion and air quality problem due to long commutes; (2) decreases dollars spent in on goods, services and entertainment; and (3) increases absences and decreases work productivity.

Social Reasons

• Approximately 14% of all owners have incomes less than 80% of the median and pay over 30% of income for housing costs.
• Approximately 39% of all renters have incomes less than 50% of the median and pay over 30% of income for housing costs.
• All families need affordable housing for a stable household environment.
• Stable households provide stable children in schools and families in neighborhoods, a stable quality of life and stable demand for goods and services which drives the economy.

People usually raise a variety of concerns if they oppose new low income housing developments. These concerns are often unfounded. Today's low income housing is generally well-maintained, attractive, safe for residents and neighbors. A number of studies conducted by housing experts confirm this statement. The following are some issues to consider:

Property values: Factors such as neighborhood desirability, characteristics of particular housing units being sold, the overall area development, and prosperity has more to do with property values than a single affordable housing development. Contemporary affordable housing is attractively designed, professionally managed, and well-maintained. For these reasons it preserves its good appearance, usefulness and its value over time, and does not reduce the desirability of the surrounding area. Much of affordable housing is indistinguishable from market rate housing.
http://www.nonprofithousing.org/actioncenter/toolbox/acceptance/affhousingpropvalues.pdf

Crime: Many of the affordable housing providers in the area carefully screen prospective tenants for criminal behavior. Much of the affordable housing developed today is managed carefully to reduce incidence of crime. It often helps reduce slum conditions by replacing deteriorated housing in concentrated areas.

Traffic: Affordable housing developments are reviewed for traffic impacts exactly the same way as market rate housing. Studies show that potential residents of affordable housing developments own fewer cars and drive less than those in the surrounding neighborhood.

Density: Affordable housing developments reduce overcrowded conditions by helping more people to live in attractive housing. Not all affordable housing is high density - contemporary developments can be single family or townhouse style living. Unlike overcrowded housing, higher density housing is designed to support more people by including amenities into developments.

Your neighbors, friends, family, and people that you rely on need and live in affordable housing. People who need affordable housing often cannot voice their support for more housing because they fear stigmatization or do not have the time to support housing developments. They need the vocal support of friends, neighbors, organizations, and other members of the community to ensure that housing remains affordable.

New developments built with Low Income Housing Tax Credits (LIHTC) often face opposition from local groups who are only too anxious to point out real or imagined negative impacts such as the strain on local budgets to provide additional school services, downward spiral on nearby property values, police and fire protections, etc. However, the new LIHTC developments have just the opposite and positive effects on local economies including income and jobs for local residents, and increased revenue for local governments.

In an average LIHTC development with 100 units, the first year impacts are approximately $7.8 million in local income, $742,000 in taxes and other revenue for local governments, and about 149 local jobs. These are one-time impacts that include both the impact of the construction activity itself and the impact of local residents who earn money from this construction activity spending part of it within the local area.

The additional, recurring impacts of building the 100 units in a typical LIHTC development includes approximately $2.2 million in local income, $324,000 in taxes and other revenue for local governments, and about 35 local jobs. These are ongoing, annual benefits that result from the new LIHTC units being occupied, and the occupants paying taxes and otherwise participating in the local economy year after year. In order to fully understand the impact of tax credit development on a community, it’s important to consider the ongoing benefits as well as the one time effects.

When the median price of a home in California was reported to be $428,000, the news meant that only 21% of Californians could afford a median priced home. This is just one reason why The Pacific Companies makes Affordable Housing their focus. Affordable Housing provides a comfortable community for our lower income families, individuals, and seniors. As the size of these groups increase so does the need for Affordable Housing.

With an Affordable Housing development, there are likely to be multiple hurdles ranging from lack of enthusiasm to “Not In My Back Yard” (NIMBY) attitudes. The Pacific Companies is familiar with these obstacles and has successfully managed many of them from presenting the development, answering questions at city council meetings, and arranging neighborhood meetings in communities where Affordable Housing developments are being considered. This provides The Pacific Companies’ representatives the opportunity to address concerns that community members may have about the development.