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Everyone’s heard about the importance of affordable housing. But there’s a lot of debate about what affordability actually means for a community. Let’s take a deeper look.

Define “Affordable”

In everyday use, the word “affordable” is simple but vague: it means that something is reasonably priced. But for housing, we need to get way more specific. Conveniently, there’s a federal definition: a home is affordable to you if it costs no more than 30% of your household income to live in it.

Spending more than that means you’re “rent burdened,” and there are a lot of rent burdened people out there right now. In fact, the US is so short on homes that in many neighborhoods, a household making the median income can’t afford the median apartment. For reference, in 2022, the Boston area median income (AMI) was $96,650 for two people, meaning the median two-person household could reasonably afford $2,416 a month in rent.

If that figure sounds high to you, it’s worth noting that the “Area” in “Area Median Income” is pretty big. For the Boston region, it runs from roughly Providence to Seabrook, and includes cities and towns with an enormous range of incomes and housing prices. Defining affordability by AMI is nowhere near perfect, but it gives us a rough estimate of what we think the midpoint of a regional housing market ought to be: the typical household should be able to rent the typical apartment, or pay a mortgage on a typical home/condo, with about a third of their income.

Kinds of Affordable Housing

Now that we’ve defined affordability, let’s talk about kinds of affordable housing. Lower-priced apartments on the open market are often called “naturally occurring affordable housing,” and most people begin a search for a home by looking for something in their budget on the open market. Our hypothetical median-income household will probably be able to find something, but it’s not exactly easy, especially if this household consists of one adult and one child looking for a lead-free 2-bedroom within their school district. For households making 60% of AMI ($58,000 a year), an affordable apartment on the open market — $1,450 a month — can be hard to find indeed. Near transit, near an existing community of support, near work? Harder still.

That’s where subsidized affordable housing, the kind of housing planners and activists are usually talking about when they say “affordable housing,” comes in. In Somerville, subsidized affordable housing includes the Section 8 voucher program that helps help people pay for market-rate apartments in any location, state and federal public housing run by the Somerville Housing Authority, and two other programs that make up the bulk of new subsidized affordable housing created in the city today:

  1. Low-Income Housing Tax Credit (LIHTC) developments, where banks, for-profit and nonprofit developers, and investors assemble complex financing arrangements to build apartments with below-market rents for some or all units, often for a fixed period of time like 30 years.
  2. Inclusionary units, where for-profit developers of larger buildings are required to set aside a percentage (20% in Somerville) of apartments for lower-income residents in exchange for getting permits to rent the rest at market rate.

And Now We Ask “For Whom?”

Even for a nonprofit or a government agency, it’s expensive to build and run an apartment building, and nearly every subsidized apartment still has to charge rent. How much varies widely. Public housing may be open to people with little or no income, while residents of LIHTC apartments typically make a mix between 30% to 80% of AMI, and the inclusionary units in market-rate buildings tend to be affordable to families making anywhere from 50% to 110% of AMI. That means that rent in an “affordable” apartment might range from about $800 to nearly $3,000 a month. Check out this table of prices from the building at 346 Somerville Avenue, in Union Square to see some specific examples, including one 3-bedroom apartment for $883 a month and one priced at $2,898.

The idea that an apartment renting for $2,898 a month can be called “affordable” strikes a lot of people as absolutely bizarre, but market prices for apartments like that are often far, far higher. Nonetheless, it’s alarming to see subsidized affordable apartments that are affordable for the region, but expensive for the neighborhood. That’s a major concern about places like Assembly Square and Suffolk Downs, where subsidized apartments might charge rents that are still too high for a lot of families nearby in East Somerville or East Boston.

That’s why you hear the question “affordable for whom?” This is sometimes a serious question from people who want to know why subsidies aren’t deep enough, and sometimes a disingenuous question from people looking for an excuse to block new housing.

What Can We Do About It?

That’s where YIMBY comes in, and in particular our goal of building alliances with other groups ranging from labor advocates to anti-displacement activists. We’re looking for three things:

  • More housing of all kinds: When we don’t have enough housing, even the lowest-quality choices can charge luxury prices. With enough options, we develop a housing market where the power isn’t tilted so starkly to sellers and landlords. In addition, building new homes creates good jobs to help people afford their own homes.
  • More tenant protections: Renters suffer the most from high housing prices, and need protection against unscrupulous landlords and the whims of the marketplace.
  • More subsidies: Even in a healthy market, people of limited means will need help to stay housed. Federal and state funding doesn’t cover anywhere near the full extent of need, and the wait list for housing assistance is years long, so it’s important to expand housing assistance programs.

To learn more about this three-pronged approach to housing abundance and affordability, we recommend the book The Affordable City. For a greater understanding of housing policy generally, we recommend Fixer Upper.