5 myths (you may believe) about affordable housing

Affordable housing is a hot topic in the news. Unfortunately, with record inflation and rising mortgage rates, fewer would-be homebuyers can afford a home. This issue affects police officers, first responders, teachers, nurses, hospitality workers and anyone who earns less than the median income in an area.

We all understand there is an issue with housing that is affordable. What’s been difficult is finding ways to combat the problem.

After serving on committees ranging from local government to the National Association of Realtors, I firmly believe much of the issue revolves around understanding what affordable housing is and what it is not.

Here are five myths about affordable housing that are not true.

Myth No. 1: Affordable housing means the same thing everywhere

The phrase “affordable housing” has different meanings. For example, the term describes other types of housing programs, such as workforce housing and low-income housing. Each housing initiative is different and has different qualifications by definition.

However, the term affordable housing is often used universally for all types of programs for the sake of simplicity.

Affordable housing, by definition, costs no more than 30 percent of a family’s income. But the thresholds for affordable housing programs will differ depending on the median income for an area.

For example, suppose the median income for a household in one place is $120,000, and in another is $90,000. In that case, different numbers determine who qualifies for affordable housing initiatives in the area.

Myth No. 2: Affordable housing and workforce housing are the same

The definitions for affordable and workforce housing depend on how the municipality or county defines the terms. Local governments often create meanings based on the needs of the area. 

Many municipalities will define affordable housing needs for households earning under 80 percent of the median income in the area. They then define workforce housing as housing incentives for individuals with an income somewhere between 80 percent and 120 percent of the median income.

But, again, these numbers vary by location based on the size and needs of the community.

Some take offense to the phrase workforce housing to define an area’s 80 percent plus median income population. Communities may feel the term implies that anyone earning under 80 percent of the median income is unemployed or underemployed, which is invalid.

That is one reason why many communities use the term affordable housing for workforce housing initiatives. 

Myth No. 3: Affordable housing is ugly and depresses property values (NIMBY)

The term Nimby means “not in my backyard.” It is one of the most common reasons affordable housing initiatives die. When a community is considering affordable or workforce housing, it is often discussed at local council meetings.

Residents can be vocal and many times stop initiatives before they start. Most often, the misunderstanding of what these initiatives are puts fear into the community.

One of the most frequently cited reasons for not wanting workforce or affordable housing near a community is the fear that it will bring down the value of the properties in that community.

Affordable housing often looks the same as other homes in the neighborhood. Usually, the only difference between an affordable housing home and a market-value home is the incentives given to the developer and the deed restrictions on the home. Other than that, homes will look the same in quality and style.

Most initiatives protect the lower-priced homes from investors. For example, deed restrictions are added to the affordable home parcels so that the current homeowner cannot profit from selling the home at market value, and investors cannot purchase them. 

Myth No. 4: Affordable housing doesn’t affect everyone

Oh, but it does, and in ways we sometimes don’t even realize. Most affordable housing initiatives target first responders, healthcare workers and teachers who work in our communities. We can attract better quality nurses, teachers, police officers and firefighters when we have housing in the area that is both affordable and close to work. Having homes that are affordable to this population directly impacts all of us.

Another overlooked advantage of affordable housing is that areas with vacant homes and properties needing updating can receive grants through local government and state programs. These programs bring the properties up to code and convert them into aesthetically pleasing, safe, affordable properties. In addition, renovating these properties through an affordable housing initiative can improve property values for the entire community.

Myth No. 5: Solving the affordable housing problem can’t be that difficult. Instead, it’s just a bunch of media hype

That’s what I thought until I became involved in the local and national committees for the subject. The big issue is that one size doesn’t fit all. Some areas have plenty of land and no developers who want to take on the issue because it’s not profitable for them.

Other regions have developers and no land. Some communities need rehabilitation instead of new construction, and areas that need new construction must develop the land.

Land development is expensive unless utility companies work with them and reduce development costs. Often utility companies do not offer incentives to the developer because it is not profitable for them.

Then, there is the biggest issue of all. NIMBY. Communities love the idea of affordable housing until it is proposed within proximity to their neighborhood.

We can all proactively promote affordable and workforce housing by understanding what it is and is not. When we educate our local communities on the truths and falsehoods of the subject, we enable everyone to have a better understanding and can positively impact the communities where we live and work. Affordable housing benefits everyone.

Missy Yost is a Realtor with eXp Realty in South Carolina. Connect with her on social media.