More than 30% of Americans are considered low-income, with many more living from a paycheck to paycheck. With little funding left for savings or for a rainy day, fewer households can afford the rising costs of rent.
Affordable housing is fast becoming the solution to combat the exorbitant housing costs that prevent many from securing a place to call home. By addressing household affordability, more families can achieve their independence and their financial stability. More importantly, it assists children with safe and rewarding opportunities. To better understand the role of affordable housing, we take a closer look at what it means, who is eligible, and the steps to qualify for an apartment to rent.
What is Affordable Housing?
Affordable housing is considered affordable units to rent for households that earn below the median income for a specific area or state.
Disposable income is used to determine household affordability and compared to the median income for that region. In the US, rent and utilities should not exceed more than 30% of an applicant’s gross income to qualify for affordable housing.
The Differences Between Public Housing and Affordable Housing
From public housing and Section 8 to affordable housing, it is easy to get confused as to what each of these rental solutions mean and which of these apply to your financial circumstances.
Public housing is owned by a local government or federal agency and provides tenants a subsidized rental. Public or social housing includes rental units, such as apartments, that are owned and managed by the government. It is primarily for qualifying low-income households.
Section 8 is an example of subsidized public housing but is owned and managed by private entities rather than exclusively by government. Qualifying persons or families will receive a housing voucher from the federal government’s housing program to provide to a landlord for the full or partial payment of rent.
Affordable housing is available for those who earn a regular salary or wage but cannot afford to pay more than 30% of their income on rent. It may or may not be subsidized and offers households a generally lower monthly rent compared to a traditional rental.
Who is Eligible for Affordable Housing?
The qualifying criteria for affordable housing will differ between each state. Prior to approval for an affordable housing lease, landlords will consider the affordability of a household compared to the median income for the area/state. A landlord will perform a credit check and will request both proof of income and proof of employment to determine eligibility.
Can Anyone Apply for Affordable Housing?
Affordable housing is available to those who fall below the median income bracket that is stipulated by the government.
Applicants who earn more than the required income for a rental will not be automatically disqualified. Individual circumstances are carefully evaluated to understand the reasons for your affordable housing application.
You must be at least 18 years of age to apply for affordable housing and be a US citizen. For those with eligibility for US citizenship (such as a Green Card), specialized government housing programs and subsidies are available.
How Affordable Housing is Making a Difference
Tough economic conditions along with the distress of COVID-19 has seen more individuals and families find themselves in unexpected and tough financial circumstances. From first-time renters to those who are downscaling, affordable housing has made it possible for households to access rentals that they can afford.
Affordable housing has played an integral part in preventing many families from becoming homeless. It has also assisted children in pursuing their schooling and education in safe, secure communities.
With modern developments in the affordable housing market, more property investors are getting on board and supporting greater economies of scale.
Affordable housing has proven its weight in gold by assisting communities in need and by adding value to established neighborhoods and areas. As the demand continues to rise, affordable housing is becoming a pertinent part of community and economic development.