When I explain to people around just what the technical definition of affordable housing is, they scoff, “impossible!”, “you can’t build anything for that!”, and my favorite, “affordable by who’s standards?”.
Definitions
Despite this disbelief, here is the definition of affordable housing…
Affordable Housing | CMHC
What is the common definition of affordability? The cost of adequate shelter should not exceed 30% of household income. Housing which costs less than this is considered affordable. However, consumers, housing providers and advocacy organizations tend to use a broader definition of affordability.
Affordable Housing – CPD – HUD
The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care.
The definition I used in a recent article came from Demographia, which states that…
The international standard for affordable housing, is that the purchase price should not exceed more than three times the gross annual household income.
This is a little easier to get a grasp on, as it breaks away from mortgage rates, the term of the loan and taxes.
[adsense:468x60:1:1]
Community and Affordable Housing
There is a distinct correlation between affordability and the level of community in a given area, but it’s not as simple as that. It doesn’t work to have all affordable housing in one subdivision, often that will create a ghetto effect where there is a lack of social diversity. There have been many examples of poor planning practice that have created islands of low-income housing surrounded by regular subdivisions.
Diversity needs to be built into a community with mixed housing types and cost-models. A truly diverse community is one where you couldn’t tell the household income just by looking at the house. There are many barriers to affordable housing, not least of which is the cost of building it in the first place, but that’s for another post.
Technorati Tags: houses, housing, affordable housing, affordable, cost of living, demographia, community, sustainable living, sustainability, income, household income, diversity
If you enjoyed this post, why not try these ones:
- Housing Diversity
- LEED ND and Affordable Housing
- Housing Cooperatives
- Affordability – Kelowna vs the World
- The ALR and Rising House Prices in BC
{ 2 comments… read them below or add one }
Rory, there are many issues Rory, there are many issues at stake here, not least the fact that land itself is prohibitively expensive once it is zoned and serviced.
For sure it is much easier to achieve both affordability and diversity in some places than others, but many places that have held these two things as ideals for decades have made little headway in achieving them. Does that tell you more about the economic drivers in communities and of developers, or the need for stronger policy to ensure that it is achieved?
Thanks for your comment, and I’m happy to say I’ve subscribed to your blog.
Mike, I completely agree Mike, I completely agree with your emphasis on diversity, although it’s difficult to achieve in practice. Here in South Africa it is almost never achieved, though in neighbouring Botswana there is actually a very good level of integration between households of different income levels in the same neighbourhoods.
I know Canada very well, having spent half my life there, and one would think it would be easier to achieve diversity in, say, Toronto than in Cape Town, simply because the differences in income aren’t as extreme. Yet Toronto doesn’t achieve it on any meaningful scale.
As for the cost of housing, here’s a thought. Possibly the biggest challenge we face in the building industry (and I say “we” as I too am a civil engineer) is changing the way buildings are constructed.
Construction methods are simply convenient, not efficient, and this is true whether we are talking of Canada’s timber frame houses or South Africa’s brick buildings. But an opportunity for improving affordability is being presented by the need to improve sustainability performance. To reduce embodied energy and carbon impacts, we must change the materials used and the way things are put together, as you are well aware.
In the short term, this is more expensive than standard methods, but I maintain that in the longer term it will actually be cheaper. Once the building industry has adapted to the change that must surely come, then we will reap the benefits of reduced energy inputs. Less energy means reduced carbon emissions, but it should also mean lower cost.
Am I being an idealist? Perhaps. I’ll wait and see what you have to say on building costs in your promised post on the topic!