Getting to the Heart of Housing's Fundamental Question: How Much Can a Family Afford? A Primer on Housing Affordability Standards in U.S. Housing Policy
34 Pages Posted: 13 May 2008
Abstract
The following primer by National Low Income Housing Coalition Research Director Danilo Pelletiere tackles one of the most perplexing problems in the affordable housing field: How much should a family pay for housing? Pelletiere points out the important distinction between using the 30% rule of thumb as a standard or as an indicator. The 30% rule of thumb can, of course, be used as an indicator of affordability.But the 30% guideline or any other single housing cost-to-income ratio (HCIR) is inadequate in and of itself to establish a standard of a family's ability to pay or a level of subsidy the family should receive. The conclusion reached is that while the 30% guideline is easy to understand and widely applied, in many cases, it simply does not work (by itself) well enough for enough families. We must be able to supplement and nuance the 30% percent rule of thumb with other criteria and guidelines, including the use of a continuous or categorical HCIR, that enable us to define housing affordability more accurately and reliably for any given family.
Keywords: Housing, Affordable Housing Indicators, Housing Cost Burden
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