Affordable Housing 101: Part Two

Updated December 25, 2018 at 12:35 p.m.

Affordable Housing 101: Part Two
The H+T analysis for the local area from the website.

LAST WEEK, I stated that affordable housing developers like to have market-rate units (and their market-rate renters) mixed into projects because it helps to make the numbers work (more income to cover operations and debt service, etc.).

Rex, my grad school buddy now working for a company that develops affordable housing, sent me a note on this, saying that while the income motive is there, it’s more than that:

“You also want market-rate units for a more sustainable community. The theory is that mixed-income communities are better maintained (landlords have to compete to attract renters for those market-rate units), and since everyone lives in the same quality unit, you can’t automatically tell who is poor or not,” he says.

“You’ll also therefore get residents who are somewhat incentivized to keep things up a bit better, as well - you don’t get the public housing ‘broken windows’ stuff. As much as that policing theory has been discredited, I think it is a useful way to think about how residents do or do not care about where they live, the effects of concentrated poverty, that sort of thing. 

“So, having market-rate units is not just about making the numbers work, although it can be.”

This is a good segue into another conversation that Rex and I had, that I didn’t have room for last week – housing vouchers.

Housing vouchers, also known as Section 8 (referring to where they were created in the Housing Act of 1937) allow low-income households to afford housing that would otherwise be beyond their reach.

Voucher-users are required to contribute 30% of their income, then the voucher bridges the gap, up to a cap determined by the AMI. It won’t help the voucher-user afford ANY housing, but it will help them afford what a household making 100% AMI can afford.

(See last week’s column if AMI makes no sense to you.)

Theoretically, a voucher-user can look for market-rate housing, and use the voucher to make it affordable to them, when otherwise they would be rent-burdened, or not be able to live in that market-rate housing at all.

Theoretically, vouchers lessen the problem of concentrated poverty by allowing the voucher-user to search out the housing choice best for them, rather than being limited to reserved, subsidized units in developments purpose-built to be affordable to low-income households.

Voucher-users would be able to easily mix in with the market-rate community, and nobody but the landlord would know that they were voucher-users, theoretically.

BUT, two big problems with those theoreticals – first, there are way more households in need of vouchers than there are vouchers to go around, and second, landlords are allowed to screen renters based on voucher-usage, unless specific state or local laws prevent such screening.

This sort of screening is allowed, rather than being seen as discriminatory, because accepting vouchers comes with extra regulatory strings and inspections.

In a recent Citylab article, “Why Is It Legal for Landlords to Refuse Section 8 Renters?” describes a study conducted by the Urban Institute and supported by HUD, on voucher-acceptance.

In cities without laws preventing screening, looking at rental units priced within range of voucher-users, but located in areas with low poverty, landlords rejected voucher-users over 80% of the time. In high-poverty areas, the rejection rate was still over 50%.

So, the minority of rental units that DO accept the vouchers tend to become known as “Section 8 housing” and tend to be in less desirable areas, and have a stigma attached to them.

These areas can often be isolated and distant from the areas on the economic rise - areas that an ambitious voucher-user would like to work their way into, and to become a market-rate inhabitant.

From the same Citylab article:

“In Houston, less than 1 percent of families who receive vouchers live in areas described as ‘high opportunity.’”

So, just because you have a voucher, it doesn’t mean that you’ve got a whole lot more freedom to live where you want.

I asked Rex what he thought would be the best way to provide affordable housing, if he were the Federal Czar of Housing.

To his credit, though he specializes in it and it puts food on his table, Rex said it would be best, and simplest, to do away with all the complicated subsidy programs promoting affordable development, and instead have what he called an expanded “clean voucher” program.

A “clean voucher” program would streamline the regulatory burdens of accepting vouchers, and then require that ALL landlords accept them, if their units meet the monthly rental requirements.

That simple. Eliminate all the complicated subsidy programs, and pour that money into vouchers instead.

“The gold standard in helping poor people is to just give them money. If you can’t do that, then make the voucher more useful, as flexible as possible, so they can make their own decision about where to live.”

To be really successful, this “clean voucher” program would also need to be coupled with a program to removed barriers to the construction of new market-rate housing, especially near transit stations and job nodes, such as with the Minneapolis 2040 plan described last week.

This brings us back to the better, broader analysis of affordability favored by Todd Litman and many, many more.

Simply, rather than the HUD-defined affordability of 30% of household income, take housing and transportation costs together, and raise the threshold to 45% of household income. This is known as “H+T” affordability.

Basically, if you are commuting over an hour both to and from work, and you have to get in your car and navigate a sprawling landscape of strip malls and big boxes for every little errand, that HUD-affordable housing that you found in the exurbs might be putting you way over the 45% H+T threshold.

The Center for Neighborhood Technology ( found that while 55% of neighborhoods in the U.S. are HUD-affordable to a typical household, that number drops to 26% with a H+T analysis.

You can see this for yourself at the CNT website, with their handy H+T Affordability Index tool. It’s really fun to play with, especially if you are a cartophile:

For a “regional typical” household, the tool finds the following expenditure rates:

Chatham county: 54% (30% for housing, 24% for transportation)

Savannah, overall: 49% (26% for housing, 23% for transportation)

Thomas Square, SE: 35% (16% for housing, 19% for transportation)

As the website says: “People who live in location-efficient neighborhoods—compact, mixed-use, and with convenient access to jobs, services, transit and amenities—tend to have lower transportation costs.”

Fixing housing, final checklist:

• Make it easier for the market to increase the housing supply – zoning reforms such as those in Minneapolis 2040.

• Make it easier for low-income households to make their own housing choices – clean vouchers.

• Make it easier for all households to get their H+T expenditures below 45% - better transit, more housing near transit, and more compact, mixed-use neighborhoods.

Done. I fixed everything. Merry Christmas.


Published December 25, 2018 at 1:00 a.m.

Jason Combs

Jason Combs is a consultant, entrepreneur, and writer with masters degrees in City Planning & Urban Design from the Georgia Institute of Technology. He is a long-time resident of the Thomas Square Streetcar Historic District.
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