Rising housing costs across the country mean people are spending more of their income than ever to keep a roof over their heads. As rent prices continue to rise, it is important to understand what affordable housing is and whether you qualify for housing assistance programs.
So what is affordable housing and who needs it? While many Americans can meet their housing needs in the private sector, the government has stepped in to create affordable housing, ensuring that the housing needs of working poor people are always met.
What is affordable housing?
The government defines affordable housing as costing no more than 30% of your income. According to National Coalition for Low Income Housing, a full-time worker must earn $ 23.96 an hour to afford a two-bedroom apartment at that 30% – 230.4% threshold above the federal minimum wage of $ 7.25 an hour .
The government’s definition of affordable housing means that if your home, rent, or mortgage costs more than 30% of your income, you can be considered a financial burden. With such a large share of income going on rent, it might be difficult to pay for other necessities such as food, health care, and transportation.
According to Harvard’s 2020 State of Housing Nation Report, one in seven households was described as “heavily burdened by costs”, meaning that they spent 50% or more of their income on shelter.
But what happens when you can’t afford housing? To determine eligibility for affordable housing, the government uses a metric called the regional median income (IAM).
What is Regional Median Income (AMI)?
The regional median income (IAM) is the central point of income distribution in a given region. This means that half of households earn more than the MAI and half of households earn less. The government uses AMI to determine the cost of renting an apartment.
To qualify for affordable housing, you must make less than 80% of the MAI. In practice, this becomes much more nuanced than the quantifiable percentages suggest.
How do housing vouchers work?
Here are the thresholds used by the HUD to determine eligibility for housing vouchers:
- 30% FRIEND: Considered as extremely low income and priority for housing vouchers.
- 50% FRIEND: Considered to be very low income and eligible for housing vouchers.
- 80% FRIEND: Considered low income and often on waiting lists for housing vouchers.
In general, the lower a tenant’s MAI, the higher the priority for housing assistance.
Types of affordable housing
Although affordable housing is defined using the MAI, there are several types of low-rental housing subsidies that you may be eligible for. In general, you need to be around 30-80% of the MAI to be eligible for housing programs.
What is public housing?
Public housing is owned and managed by local housing authorities, but disappears in favor of Sections 8 and 42 housing. Public housing consists of government sponsored units, which means that the entire building is government owned.
What is section 8?
While both work to serve low-income households, Section 8 is a program that uses housing vouchers to house low-income tenants on private properties. These are given in priority to those who need them most.
To be eligible for Section 8 housing, you must find apartments that accept Section 8 vouchers and meet appropriate housing quality standards. These housing vouchers are available to low-income households and are prioritized for those who need them most.
What is section 42?
Housing under section 42 is part of the low income housing tax credit program. It can be difficult to distinguish between Section 8 and Section 42 units. While Section 8 on housing provides tenants with government assistance, Section 42 is a landlord-based provision whereby properties house a certain percentage of low-income residents in return for tax credits.
How to Apply for Affordable Housing
Applying for affordable housing is no easy task. There is much more demand for affordable housing than there is the supply of housing subsidies. Many applicants spend years on the waiting list before obtaining government assistance. To make sure you’ve secured your place on the waiting list, follow the steps below to apply for affordable housing.
1. Meet the eligibility conditions
To benefit from the housing voucher program, you must contact the Public Housing Agency (PHA) to determine if you are eligible for the program. Next, you need to make sure you meet the standards set by your local PHA. This Criteria includes:
- Family: A household where the head of the household is an elderly, displaced person, a disabled person, the remaining member of a tenant family or a single person.
- Returned: The household falls within the very low income limit (50% of the MAI) or the low income limit (80% of the MAI).
- Citizenship: Household members must be eligible citizens or immigrants.
- Deportation for criminal activity: Household members must not have been evicted from social housing or Section 8 for drug-related criminal activity within the past three years.
2. Submit an application and interview
Once you have confirmed your eligibility, you must submit a written request for a housing voucher. This app includes information about everyone in the household and additional circumstances that can help you qualify, such as being a military veteran.
You will then be asked to conduct an in-person interview with a representative of the Régie du logement.
3. Monitor the waiting list
Depending on your region, the time you spend on a wait list can vary widely. The waiting list can also prioritize those who need it the most, so you can periodically contact the housing authority to get an estimate of your position on the waiting list.
Make sure you keep all of your application documents, such as your login details and your position on the waiting list.
4. Find your rental
Once you are on the waiting list, you will receive a housing voucher, which covers the remainder of your rent above the 30% threshold. However, you will need to make sure that the rental of your choice meets PHA requirements and that the rental amount is reasonable.
Understanding the nuances of what affordable housing is and how to apply for it can be tricky. Making sure you’re on top of your documents and application is essential to streamline the process. After completing an application and spending time on the waiting list, you will need to secure a good rental that meets PHA requirements.
Are you looking for the rental property suited to your needs? Use our apartment finder to help you find the rental that suits your budget today.