Understanding the Policies of Affordable Housing

The affordable housing policy is a very important priority of the government and is put in place to ensure everyone has a decent place to live, notwithstanding their income level.

The Department of Housing and Urban Development (HUD) provides affordable housing for low-income households that earn less than 80% of the median income in their local area. In this area, median income varies among states and cities.

Rising housing costs and income disparity lead to a huge shortage of affordable rental housing for low-income families in many metropolitan regions across the country. The COVID-19 pandemic has also escalated the issue of affordable housing, especially for low-income households who are at risk of eviction from their homes due to financial difficulty.

What is affordable housing?

Affordable housing is housing for low-income families and individuals who spend no more than 30% of their family income on housing. The affordable housing program is a scheme set up by the federal government through the Department of Housing and Urban Development to curb the issue of homelessness in the country.

The affordable housing policy has ensured that the housing market provides affordable housing to numerous people while alleviating the homelessness issue faced in different cities.

The Federal Housing Administration (FHA) was created in 1934 as a National Housing Act to ensure the availability of housing loans through regulated interest rates and mortgage terms.

The Public Housing Authority (PHA) was also created to handle the decision of public housing availability by selecting projects for affordable housing, making decisions for other housing projects, and also issuing tax-exempt bonds for private developers’ housing construction.

Specialized Types of Affordable Housing

There are different types of housing in which people live, of which a high percentage is said to be affordable. Some of the specialized affordable housing options include:

• Transitional housing: which is usually designed for temporary use by people who have been attacked by natural disasters or are recovering from other physical housing problems.
• Co-housing: this type of housing offers separate bedrooms, but occupants would have to share the other common areas of the house, which include the kitchen and bathroom.
• Housing for people with special needs, the disabled, and the elderly: this housing is designed specifically for people with special needs, the disabled, and the elderly. People who are survivors of domestic violence or those living with AIDS are also beneficiaries of this type of housing.

Affordable Housing Policies

Housing policies are regarded as the actions put in place by the government to impact the housing supply and its availability to everyone.

The housing policies are diverse and varied among local government areas.

Let’s discuss some of the policies made available by the government below.

Program for Rental Assistance

This includes the Low-Income Housing Tax Credit, public housing, and affordable housing vouchers, which are made available to low-income and moderate-income households and individuals.

The rental assistance program is also used to assist low-income families to obtain affordable and quality rental housing in their local area.

Homeownership assistance programs

The homeownership assistance programs focus on the expansion and availability of homeownership for low-income families. The program aims to subsidize the production of housing by providing low-interest loans to prospective homeowners.

Land use and regulatory initiatives

This is another approach used by the government to give developers guidelines about the location and cost of affordable housing projects. These initiatives include zoning regulations, building codes, and local land-use guidelines.

What Are the Benefits of Public Housing?

Public housing is one of the rental assistance programs that provide affordable housing to low-income households in the US. Public housing assists low-income families and individuals to acquire decent rental housing units to avoid eviction and homelessness.

The public housing program was initiated to limit the cost of housing, allowing families to focus on other day-to-day expenses like food, healthcare, transportation, and so on. People with disabilities and the elderly also benefit from this program by getting affordable housing suitable for their needs.

Conclusion

The US government has put in place a variety of affordable housing policies and options for low-income renters and homeowners, but many of these policies sometimes lack basic economic design. Above all, affordable housing programs must focus on boosting the affordability of housing units by defaulting on housing costs and enhancing their availability.