Affordable Housing 101

Why is housing growing less affordable?

To comfortably afford a home in virtually any housing market, families that depend on workers in low- paying jobs require ongoing subsidies such as those provided by the federal government through its various rental assistance programs. Unfortunately, available subsidies serve only about one- quarter of those in need- a strong argument for continued and expanded federal funding for these programs.

Because there are many more eligible families than resources available to serve them, two other factors come into play in selecting families for admission to federally subsidized housing.

The first is “income targeting”- a rule that directs a certain percentage of new admissions to families with incomes below 50 percent of the area median income. The rule is intended to ensure that families with the most severe housing needs are prioritized for scarce rental subsidies.

The second factor is local admissions criteria which allows public housing agencies and private owners of assisted housing to admit families based on other criteria (e.g., priority to homeless families, the elderly, or selection by lottery).

When state and local housing programs use federal funding, they are subject to federal rules. When using only state or local funds for housing, however, they are not subject to these rules. As housing challenges have grown among moderate- income families, a number of states and localities have decided to use purely state or local funding to meet the needs of these families. States and localities are also using policy tools other than direct subsidies- such as innovative zoning policies, tax abatements, and the use of publicly owned land- to meet the housing needs of these families.

This chart from HousingForward Virginia’s Sourcebook illustrates how the percentage of income needed for housing has changed over time.

Affordability of Housing at Median Household Income in Virginia