Affordable housing is a term that means attainable by lower or middle-income families, as rated by the official Housing Affordability Index. According to the U.S. government, housing should cost no more than 30 percent of a household’s monthly income. People who fall within the low to medium income range require housing they can afford while still having money for other life necessities such as food, health care, and transportation.
The National Low Income Housing Coalition (NLIHC) educates both lawmakers and the public about the necessity for affordable homes throughout America. Their focus is on preserving existing federally-aided housing resources and expanding low-income housing projects.
The benefits of embracing affordable housing development are numerous. The ROI is consistent in the form of rent, social service costs are lowered because it helps break the poverty cycle through social programs, and developers can opt to defer a portion of the
As an incentive, the government offers a Low-Income Housing Tax Credit (LIHTC). This is the most extensive federal program to-date that is meant to encourage the construction of affordable rental housing within the U.S. This organization has subsidized the renovation or new construction of over three million units. The tax credits go to developers through the individual states and have been able to place an average of 107,000 housing units each year. Seen as a win-win scenario, developers can use their tax breaks to construct housing that, in turn, enhances communities in need of help. Two qualifiers for the tax credit are the income test and the gross rent test. The income test is done to guarantee that the occupants of a home meet the income criteria. The gross rent test measures predicted units against area median income (AMI).
As a developer, there are many effective ways to approach legislators regarding affordable housing. The first rule of thumb is to form relationships with the staff who work at district offices. Since government subsidies are given out are the state and local levels, that is where you need to begin. Lawmakers themselves are too busy to know all the ins and outs of complicated housing legislation, but their staff will. When the time comes to ask about affordable housing, you already have one foot in the door. If you wait until it’s already an emergency, there might not be enough time to set the wheels in motion.