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What is Affordable Housing?

Affordable housing is any housing for which total costs (rent or mortgage plus utilities) are no more than 30% of a household’s annual income. All families, including those with low incomes, should be able to find well maintained housing that meets their budget. Typically, the phrase “affordable housing” means total housing costs that are affordable (costing no more than 30% of income) for a family earning at or below 80% of the area median income (AMI). Currently in greater Boston, 80% of AMI for a family of 4 is $66,150. This family of four should not spend more than $1,654 on its monthly rent or mortgage payments, plus utilities. The 80% figure is just an upper limit, though. Many families earn much less than this and have much less to spend on housing.

Affordable Housing comes in many forms:

1. Public housing is owned by the federal or state government and managed by local Housing Authorities who report to HUD or to the State Department of Housing and Community Development. To qualify, families must have incomes at or below 50% of the area median income (AMI). Rents are set at 30% of a family’s income. To apply, contact the Medford Housing Authority at 781-396-7200.

2. Section 8 is another federal program. Low-income families with Section 8 vouchers pay 30% of their income in rent to their private landlord, and the federal government pays the balance to the landlord, up to a set limit. The State also runs a program similar to the federal one called MRVP, Massachusetts Rental Voucher Program. To apply for Section 8 or MRVP, contact the Medford Housing Authority at 781-396-7200.

3. A lot of affordable housing is privately built and owned. This housing is often managed by a private company or non-profit organization with a mission to provide affordable housing. The company or non-profit generally uses a combination of government funding, grants and low interest loans to keep costs low. Such properties are deed restricted to keeps rents affordable for the long-term, to prevent low income families from being forced out of their community.

Some privately developed and managed affordable housing is created by for profit companies, often as part of a mandated program to create affordable housing, such as the affordable units developed in several of Medford’s surplus school buildings. In such cases, a municipality can create a policy that is feasible for developers but that also provides the housing its residents need.

4. Until recently, much affordable housing was actually privately owned but unprotected. This housing was (or is) owned by a landlord who charges moderate rates, while still covering costs and making money on his/her investment. Properties like this almost always permanently lose their affordability if the landlord decides to significantly increase rents, sell the property or convert to condos. In some cases, tenants have been able to organize to purchase the building themselves or work with a non profit to purchase the site and retain its affordability.

There are many more people who would qualify for public housing or section 8 than there are public units or vouchers to give. And there are many more people with low- and moderate incomes than there are homes with low or moderate rents or sales prices.