AFFORDABLE HOUSING IN FLORIDA
WHAT IS AFFORDABLE HOUSING?
Affordable housing is safe and decent housing. It differs from market rate housing in two ways:
- The income of the family living in the housing.
- The financing of the housing.
Affordable housing is defined in terms of the income of the people living in the home. The family must be income eligible. Income eligibility is defined in terms of area median income, adjusted for family size.
- Extremely low income describes a family at or below 30% of area median income.
- Very low income describes a family at or below 50% of area median income.
- Low income describes a family at or below 80% of area median income.
- Moderate income describes a family at or below 120% of area median income (at or below 100% of median income for federal programs.)
The median income is determined by the Department of Housing and Urban Development (HUD) by county or Metropolitan Statistical Areas (MSAs). Median incomes are updated annually by HUD. You can find this information on the HUD website or on the Florida Housing Coalition’s website. Click on SHIP, Income Limits.
Affordable housing is safe and decent housing. If the housing stock in a community is substandard it should not be counted as a unit of affordable housing. In general, the income eligible household is said to be living in affordable housing when it spends no more than 30% of its income on either rent or mortgage payments. There is an assumption that if a very low to moderate income family is spending more than 30% of its income on housing costs, the family will be cost burdened and not have enough money left over to pay for items such as transportation, food, clothing, and healthcare.
It follows that the concept of affordable housing is not applicable to wealthy households. If a household earning $200,000 per year chooses to spend as much as 50% of its income on housing cost, it could do so without being cost burdened. Generally, the issue of whether housing meets the technical definition of “affordable” ceases to be a societal concern when the income of the occupant exceeds 120%, or in some jurisdictions, 80% of the area median income.
What makes the housing affordable is a decrease in monthly rent or mortgage payments, so that the income eligible family is able to pay less for the housing than it would otherwise cost at “market rate.” Lower monthly payments or down payment assistance is a result of affordable housing financing. The financing of affordable housing is made possible through government programs such as the Low Income Housing Tax Credit Program (referred to as the Housing Credit program by the Florida Housing Finance Corporation) and the State Housing Initiatives Partnership (SHIP)program. The major financing programs for affordable housing are covered in the guidebook, Affordable Housing Resource Guide, which can be downloaded from the Florida Housing Coalition’s website. You will find a summary of each program along with contact information. You can also find information about Florida’s Affordable Housing Finance Programs by going to the Florida Housing Finance Corporation (FHFC) website. There was a time, not too long ago, when affordable housing was synonymous with public housing. Historically, public housing was housing built and operated by the government. Oftentimes (especially in the Northeast part of the United States) the public housing of yesteryear was built in a large barrack type of style, easily distinguishable from market rate housing. The government is no longer in the business of building and operating affordable housing, unless it is doing so in partnership with the private sector.
Read the entire Affordable Housing in Florida guide.