UNDERSTANDING AFFORDABLE HOUSING

    Many people in the United States and in other countries face increasing distress because they cannot find affordable housing. The average American home cost almost $273,000 in 2010, illustrating the increasing pressure the poor and working poor face when trying to secure a place to live.

    Affordable housing generally means that a residence costs no more than 30 percent of a resident’s income. This metric works well when evaluating rental properties, but often a prospective buyer must make a serious inquiry into a home to find out what a monthly payment would be.

    Home builders naturally are interested in building the most expensive homes possible, because they earn the most money per unit. In these cases, the market often enters a crisis because the median cost of a residence is out of the reach of the median wage-earner, resulting in increased numbers of homeless people and tenants and homeowners who are paying more than they can realistically afford.

    In some states and localities, laws are in place that require builders to construct a certain number of affordable housing units as part of every development. Although this helps force the creation of some affordable housing units, technicalities and loopholes often result in the construction of few if any affordable units.

    The United States Department of Housing and Urban Development runs a number of programs designed to promote the construction of affordable housing and to provide subsidies and other programs that help the poor find a place to live. Programs such as HOME Investment Partnerships, Self-Help Ownership and Ownership Zones are just a few ways the federal government works with states to reduce the effects of the affordable housing crisis.

    Those who need affordable housing and cannot find it should begin their search by visiting federal web sites that describe the programs that are available in their state. Application criteria and forms are all available online as are instructions that help people know where to go in their area to get help finding a place to live.

    Unfortunately, the availability of federal programs can have an inflationary affect on housing prices. This happens when builders are aware that federal housing subsidies are available in an area and then charge higher prices. When this happens, even some people with housing subsidies find themselves unable to find a place to live.