Affordable Housing

One of the most pressing issues facing communities throughout the United States is the lack of safe, decent, and affordable housing. As wages stay stagnant while housing costs rise,2 a growing number of low-income men, women, and families3 are unable to find a place to live that meets the conventional definition of affordability—housing for which residents pay no more than 30 percent of their gross income toward rent or mortgage payments.4

In response to the unmet need for housing accessible to low-income individuals and families, a community of nonprofit and for-profit developers, social service organizations, neighborhood and charity organizations, lenders, financiers, and government agencies has emerged over the past forty years to produce and operate what is now commonly referred to as "affordable housing." As a broadly used term, affordable housing includes rental, for-sale, co-, and transitional housing that is income restricted and usually developed through one or more forms of public subsidy. Affordability is achieved by setting the monthly rent or mortgage payment in accordance with the resident's income, rather than at market rates.

The most common types of affordable housing are:

• Rental housing for very low-, low-, and moderate-income individuals and families

• For-sale housing for very low-, low-, and moderate-income individuals and families

• Housing for people with special physical or mental health needs

• Housing for people transitioning out of homelessness or medical or psychiatric institutions, or for emancipated foster youth leaving the family foster care system

• Housing for seniors

• "Sweat-equity" or self-help homes

Affordable housing developers rely on a variety of financial programs administered by federal, state, and local public agencies financial institutions and philanthropic organizations to realize their projects. This assistance is often in the form of tax credits, debt with preferential rates or terms, mortgage guarantees, and grants. While this book outlines a green building process and recommended practices that apply to all types of affordable housing, we emphasize the most common type of affordable housing developed in the United States—income-restricted rental housing funded through a combination of tax credits, preferential debt, grants, and other public subsidies.

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