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http://en.wikipedia.org/wiki/Affordable_housing

Affordable housingFrom Wikipedia, the free encyclopedia

The examples and perspective in this articledeal primarily with North America

and do not represent aworldwide viewof the subject.Pleaseimprove this

articleand discuss the issue on thetalk page.(December 2010)

Affordable housing is that which is deemed affordable to those with a median household income.[1] In Australia, the National

Affordable Housing Summit Group developed their definition of affordable housing as housing which is "reasonably adequate in

standard and location for lower or middle income households and does not cost so much that a household is unlikely to be able

to meet other basic needs on a sustainable basis."[2] In the United Kingdom affordable housing includes "social rented and

intermediate housing, provided to specified eligible households whose needs are not met by the market."[3] Most of the literature

on affordable housing refers to a number of forms that exist along a continuum - from emergency shelters, to transitional

housing, to non-market rental (also known as social or subsidized housing), to formal and informal rental, indigenous housing

and ending with affordable home ownership.[4][5][6][7]

The notion of housing affordability became widespread in the 1980s in Europe and North America. A growing body of literature

found it problematic.[8][9][10][11][12][13][14]Notably, the shift in UK housing policy away from housing need to the more market-oriented

analyses of affordability was challenged by Whitehead (1991).[15] This article discusses the principles that lie behind the concepts

of need and affordability and the ways in which they have been defined.

This article focuses on the affordability of owner-occupied and private rental housing as social housingis a specialised tenure.

Housing choice is a response to an extremely complex set of economic, social, and psychological impulses.[14] For example,

some households may choose to spend more on housing because they feel they can afford to, while others may not have a

choice.[16]In theUnited States[17] and Canada,[18] a commonly accepted guideline for housing affordability is a housing cost that

does not exceed 30% of a household'sgross income. When the monthly carrying costs of a home exceed 3035% of household

income, then the housing is considered unaffordable for that household. Determining housing affordability is complex and the

commonly used housing-expenditure-to-income-ratio tool has been challenged. Canada, for example, switched to a 25% rule

from a 20% rule in the 1950s. In the 1980s this was replaced by a 30% rule.[14] India uses a 40% rule.

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Contents

[hide]

1 Measuring housing affordability

o 1.1 A perfectly balanced housing market

o 1.2 Housing expenditure to income ratio tool

o 1.3 Housing Affordability Index (HAI)

2 Household income and wealth

3 Housing expenditures

o 3.1 Causes and consequences of rise in house prices

o 3.2 Other housing expenditures

4 Growing density convergence and regional urbanization

5 Economy

o 5.1 Supply and demand

o 5.2 Factors that affect the overall volume of housing stock

o 5.3 Factors that affect tenure choices (ex. owner occupier,

private rented, social rented)

6 Labour market performance

7 Social costs of lack of affordable housing

o 7.1 Jobs, transportation, and affordable housing

8 Affordable housing and public policy

o 8.1 Right to build

o 8.2 Government restrictions on affordable housing

9 Affordable housing by country

o 9.1 Australia

9.1.1 Western Australia Department of Housing

Affordable Homes Scheme

9.1.1.1 Shared Home Ownership

9.1.1.2 Affordable House Sales

o 9.2 Canada

9.2.1 Ontario

9.2.2 British Columbia

o 9.3 China

o 9.4 India

o 9.5 United Kingdom

9.5.1 A tradition of social housing in the United

Kingdom

9.5.2 Council houses

o 9.6 United States

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housinghttp://en.wikipedia.org/wiki/Affordable_housing#Affordable_housing_by_countryhttp://en.wikipedia.org/wiki/Affordable_housing#Australiahttp://en.wikipedia.org/wiki/Affordable_housing#Western_Australia_.E2.80.93_Department_of_Housing_Affordable_Homes_Schemehttp://en.wikipedia.org/wiki/Affordable_housing#Western_Australia_.E2.80.93_Department_of_Housing_Affordable_Homes_Schemehttp://en.wikipedia.org/wiki/Affordable_housing#Shared_Home_Ownershiphttp://en.wikipedia.org/wiki/Affordable_housing#Affordable_House_Saleshttp://en.wikipedia.org/wiki/Affordable_housing#Canadahttp://en.wikipedia.org/wiki/Affordable_housing#Ontariohttp://en.wikipedia.org/wiki/Affordable_housing#British_Columbiahttp://en.wikipedia.org/wiki/Affordable_housing#Chinahttp://en.wikipedia.org/wiki/Affordable_housing#Indiahttp://en.wikipedia.org/wiki/Affordable_housing#United_Kingdomhttp://en.wikipedia.org/wiki/Affordable_housing#A_tradition_of_social_housing_in_the_United_Kingdomhttp://en.wikipedia.org/wiki/Affordable_housing#A_tradition_of_social_housing_in_the_United_Kingdomhttp://en.wikipedia.org/wiki/Affordable_housing#Council_houseshttp://en.wikipedia.org/wiki/Affordable_housing#United_Stateshttp://en.wikipedia.org/wiki/Affordable_housing#New_York_City

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[edit]Measuring housing affordability

[edit]A perfectly balanced housing market

"A common measure of community-wide affordability is the number of homes that a household with a certain percentage

ofmedian income can afford. For example, in a perfectly balanced housing market, the median household (and the half of the

households which are wealthier) could officially afford the median housing option, while those poorer than the median home

could not afford the median home. 50% affordability for the median home indicates a balanced market."[19]

A community might track the percentage of its housing that is affordable to households earning 60% of median income.

The Median Multiple indicator, recommended by theWorld Bankand theUnited Nations, rates affordability of housing by

dividing the median house price by gross [before tax] annual median household income). This indicator rates housing

affordability on a scale of 0 to 5 with categories 3 and under being affordable. From 3 to 5 the categories are rated as moderate

(3.1 to 4.0), serious (4.1 to 5.0) and severe unaffordability (5.1 and over).] [20] Using this indicator, Demographia, provides

market-based annual housing affordability ratings.

[edit]Housing expenditure to income ratio tool

Determining housing affordability is complex and the commonly used housing-expenditure-to-income ratio tool has been

challenged. Canada, for example, switched to a 25% rule from a 20% rule in the 1950s. In the 1980s this was replaced by a

30% rule.[14]

[edit]Housing Affordability Index (HAI)

One of its greatest strengths of the HAI developed by MIT is its ability to capture the Total Cost of Ownership of individuals

housing choices. In computing the index the obvious cost of rents and mortgage payments are modified by the hidden costs of

those choices.[21]

[edit]Household income and wealth

Income is the primary factor not price and availability, that determines housing affordability.[22]In a market economy the

distribution of income is the key determinant of the quantity and quality of housing obtained. Therefore in order to understand

challenges of making housing affordable, it is essential to understand trends and disparities in income and wealth. Housing is

often the single biggest expenditure of low and middle income families. For low and middle income families, their house is also

the greatest source of wealth.[23]

The most common approach to measure the affordability of housing has been to consider the percentage of income that a

household spends on housing expenditures. Another method of studying affordability looks at the regular hourly wage of full-time

workers who are paid only the minimum wage (as set by their local, regional, or national government). The hope is that a full-

time worker will be able to afford at least a small apartment in the area that he or she works in. Some countries look at those

living inrelative poverty, which is usually defined as making less than 60% of themedian household income. In their policy

reports, they consider the presence or absence of housing for people making 60% of the median income.

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[edit]Housing expenditures

Housing affordability can be measured by the changing relationships between house prices and rents, and between house

prices and incomes.[24] There has been an increase among policy makers in affordable housing as the price of housing has

increased dramatically creating a crisis in affordable housing.[25]

Since 2000 the "world experienced an unprecedented house price boom in terms of magnitude and duration, but also of

synchronisation across countries."[26] "Never before had house prices risen so fast, for so long, in so many countries."[24] Prices

doubled in many countries and nearly tripled in Ireland.

The bursting of the biggest financial bubble in history in 2008 wreaked havoc globally on the housing market. By 2011 home

prices in Ireland had plunged by 45% from their peak in 2007. In the United States prices fell by 34% while foreclosures

increased exponentially. In Spain and Denmark home prices dropped by 15%. However, in spite of the bust, home prices

continue to be overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands,

Spain and Sweden.[24]

[edit]Causes and consequences of rise in house prices

Costs are being driven by a number of factors including:

demographics shifts

the declining number of people per dwelling

Growing Density Convergence, Regional Urbanization

solid population growth (for example sky-high prices in Australia and Canada a rising population pushes up

demand).[24]

supply and demand

a shortfall in the number of dwellings to the number of households

smaller family size

the strong psychological desire for home ownership,[27]

shifts in economic policies and innovations in financial instruments

reduced profitability of other forms of investment

availability of housing finance[26]

low interest rates[26]

mortgage market innovations[26]

public policy

deregulation

land use zoning

[edit]Other housing expenditures

In measuring affordability of housing there are various expenditures beyond the price of the actual housing stock itself, that are

considered depending on the index being used.

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[edit]Supply and demand

The market has been unable to meet the growing demand to supply housing stock at affordable prices. Although demand for

affordable housing, particularly rental housing that is affordable for low and middle income earners, has increased, the supply

has not.[30][31][32][33]Potential home buyers are forced to turn to the rental market, which is also under pressure.[34] An inadequate

supply of housing stock increases demand on the private and social rented sector, and in worse case scenarios, homelessness.

[25]

[edit]Factors that affect the overall volume of housing stock

Demographic and behavioural factors

Migration (to cities and potential employment)

Increased life expectancy

Building codes[35]

A greater propensity for people to live alone

Young adults delaying forming their own household (in advanced economies).

[edit]Factors that affect tenure choices (ex. owner occupier, private rented, social

rented)

Employment rates

Rising unemployment rates increase demand for market rentals, social housing and homelessness.

Real household incomes

Household incomes have not kept up with rising housing prices

Affordability of rents and owner occupation Interest rates

Availability of mortgages

Levels of confidence in the economy and housing market

Low confidence decreases demand for owner occupation[25]

[edit]Labour market performance

In both large metropolitan areas and regional towns where housing prices are high, a lack of affordable housing places local

firms at a competitive disadvantage. They are placed under wage pressures as they attempt to decrease the income/housingprice gap. Key workers have fewer housing choices if prices rise to non-affordable levels. Variations in affordability of housing

between areas may create labour market impediments.

Potential workers are discouraged from moving to employment in areas of low affordability. They are also discouraged from

migrating to areas of high affordability as the low house prices and rents indicate low capital gain potential and poor employment

prospects.[36]

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[edit]Social costs of lack of affordable housing

Housing affordability is more than just a personal trouble experienced by individual households who cannot easily find a place to

live. Lack of affordable housing is considered by many urban plannersto have negative effects on a community's overall health.

[37]

[edit]Jobs, transportation, and affordable housing

Lack of affordable housing can make low-cost labor more scarce, and increase demands on transportation systems (as workers

travel longer distances between jobs and affordable housing). Housing cost increases in U.S. cities[38][39]have been linked to

declines in enrollment at local schools.[40]

"Faced with few affordable options, many people attempt to find less expensive housing by buying or renting farther out, but long

commutes often result in higher transportation costs that erase any savings on shelter." Pollard (2010) called this the "drive 'til

you qualify" approach which causes far-flung development and forces people to drive longer distances to get to work, to get

groceries, to take children to school, or to engage in other activities.[41]A well located dwelling might save significant household

travel costs and therefore improve overall family economics, even if the rent is higher than a dwelling in a poorer location.[2] A

household's inhabitants must decide whether to pay more for housing to keep commuting time and expense low, or to accept a

long and/or expensive commute in order to obtain "better" housing. The absolute availability of housing is not generally

considered in the calculation of affordable housing. In a depressed or sparsely settled rural area, for example, the predicted

price of the canonical median two-bedroom apartment may be quite easily affordable even to a minimum-wage worker if only

any apartments had ever been built. Some affordable housing prototypes includeNano House andAGTHP.

[edit]Affordable housing and public policy

Policy makers at all levels - global, national, regional, municipal, community associations - are attempting to respond to the issue

of affordable housing, a highly complex crisis of global proportions, with a myriad of policy instruments. These responses range

from stop-gap financing tools to long-term intergovernmental[42]infrastructural changes.

In the simplest of terms, affordability of housing refers to the amount of capital one has available in relation to the price of the

goods to be obtained. Public policies are informed by underlying assumptions about the nature of housing itself. Is housing a

basic need, a right,[43][44] an entitlement, a public good, or even, as in the case of home purchasing in the United States, a civic

duty? Or is just another household-level consumer choice, a commodity or an investment within the free market system?

"Housing Policies provide a remarkable litmus test for the values of politicians at every level of office and of the varied

communities that influence them. Often this test measures simply the warmth or coldness of heart of the more affluent andsecure towards families of a lower socio-economic status (Bacher 1993:16)." [45]

Affordable housing needs can be addressed through public policy instruments focussed towards the demand side of the market

where households are assisted in reaching financial benchmarks without which housing is not affordable. This can include

approaches that simply promote economic growth in general, in the hope that a stronger economy, higher employment rates and

higher wages will increase the ability of households to acquire housing at market prices. Federal government policies define

banking and mortgage lending practices, tax and regulatory measures affecting building materials, professional practices (ex.

real estate transactions).[42]The purchasing power of individual households can be enhanced through tax and fiscal policies that

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result in reducing the cost of mortgages and the cost of borrowing. Public policies may include the implementation of subsidy

programs and incentive patterns for average households.[42]For the most vulnerable groups, such as seniors, single-parent

families, the disabled, etc. some form of publicly-funded allowance strategy can be implemented providing individual households

with adequate income to afford housing.

Or policy instruments may focus on production strategies which facilitate increased production on the supply side of affordable

housing which can include refurbished older stock and/or the construction of new housing units. China's housing policy during

the period of central planning prior to the reform, included constructing and allocating virtually free and unsustainable publicly-

funded housing.

Currently some of the policies that facilitate production on the supply side include favorable land use policies such as

inclusionary zoning, relaxation of environmental regulations, and the enforcement of affordable housing quotas in new

developments.

In some countries, such as Canada, municipal governments began to play a greater role in developing and implementing

policies regarding form and density of municipal housing in residential districts, as early as the 1950s.[42] At the municipal level

recently promoted policy tools include relaxation of prohibitions against accessory dwelling units, and reduction of the amountofparking that must be built for a new structure.

Affordable housing is a controversial reality of contemporary life, for gains in affordability often result from expanding land

available for housing or increasing the density of housing units in a given area. Ensuring a steady supply of affordable housing

means ensuring that communities weigh real and perceived livabilityimpacts against the sheer necessity of affordability. The

process of weighing the impacts of locating affordable housing is quite contentious, and is laden with race and class

implications. Recent research, however, suggests that proximity to low-income housing developments generally has a positive

impact on neighborhood property conditions.[46]

The growing gap between rich and poor since the 1980s manifests itself in a housing system where public policy decisions

privilege the ownership sector to the disadvantage of the rental sector.[42]

[edit]Right to build

An article in the November 2007 issue ofAtlantic Monthly reported on a study of the cost of obtaining the "right to build" (i.e. a

building permit, red tape, bureaucracy, etc.) in different U.S. cities. The "right to build" cost does not include the cost of the land

or the cost of constructing the house. The study was conducted byHarvardeconomists Edward Glaeser and Kristina Tobio.

According to the chart accompanying the article, the cost of obtaining the "right to build" adds approximately $600,000 to the

cost of each new house that is built inSan Francisco.[47]

[edit]Government restrictions on affordable housing

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A cheap to build traditionalSummer house inSwedenthat legally can't be lived in permanently.

Many governments put restrictions on the size or cost of a dwelling that people can live in. Making it essentially illegal to live

permanently in a house that is too small, low cost or not meeting to other government defined requirements. Generally these

laws are implemented in an attempt to raise the perceived "standard" of housing across the country. This can lead to thousands

of houses across a country being left empty for much of the year even when there is a great need for more affordable housing

such as is the case in countries likeSweden, Norway,Finland and Denmarkwhere there is a common tradition to have

a summer house. This sometimes raises concerns for the respect of rights such as theright to utilize ones property.

[edit]Affordable housing by country

[edit]Australia

Australians in receipt of many social security benefits from Centrelink who rent housing from a private landlord are eligible

forrent assistance. Rent assistance is a subsidy paid directly to the tenant in addition to the basic Centrelink benefit such as the

Age Pension or the Disability Pension. The amount of rent assistance paid depends on the amount of rent payable, whether thetenant has dependents and how many dependents there are. Tenants who live inpublic housing in Australia are not eligible for

rent assistance.[48]

Australians buying a home for the first time are eligible for a first home owner grant. These grants were introduced on 1 July

2000 and are jointly funded by the Commonwealth government and thestate and territory governments. First home buyers are

currently eligible for a grant ofA$7000 to alleviate the costs of entering the housing market.[49]

The Commonwealth government in 2008 introducedfirst home saver accounts, whereby those saving for a new home are

eligible for government contributions to their savings account, subject to conditions.[50]

[edit]Western Australia Department of Housing Affordable Homes Scheme

The long-term goal of the Department is to deliver at least 20,000 more affordable homes by 2020 for low to moderate income

earners, through theOpening Doors Scheme.[51]Opening Doors offers two ways for Western Australians to own their own

homes.

[edit]Shared Home Ownership

The Shared Home Ownership[51] is the only scheme of its kind in Australia. Western Australians can purchase their own home

with help from the Department of Housing with a SharedStart loan through Keystart, the Governments lending provider. With

shared ownership, the initial cost of buying a home is reduced, as the Department will retain up to 30% of the property. TheDepartment's share will depend on your borrowing capacity, household size, and the location and type of property to be

purchased. In the future, the buyer may have the option to purchase the full amount or sell the home back to the Department.

With a ShareStart loan you can purchase newly-built homes and off-theplan properties offered by the Department of Housing.

[edit]Affordable House Sales

The Department of Housing (the Housing Authority), through the Housing Authority, now offers Affordable House Sales [51]to the

general public. There properties are available to anyone interested in purchasing a home. The Department works closely with

industry to ensure that properties being developed for sale will be affordable for those on low-to-moderate incomes.

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[edit]Canada

Main article:Affordability of housing in Canada

In Canada affordability is one of three elements (adequacy, suitability) used to determine core housing needs.[18]

[edit]Ontario

In 2002, the Social Housing Services Corporation (SHSC) was created by Province ofOntarioto provide group services for

social housing providers (public, non-profit and co-op housing) following the downloading of responsibility for over 270,000

social housing units to local municipalities. It is a non-profit corporation governed by a board of municipal, non-profit and co-op

housing representatives. Its mandate is to provide Ontario housing providers and service managers with bulk purchasing,

insurance, investment and information services that add significant value to their operations.

With an annual budget of $4.5 million, SHSC and its two subsidiaries, SOHO and SHSC Financial Inc. offers a dedicated

insurance program for social housing providers, bulk gas purchasing and an innovative energy efficiency retrofit program which

coordinates energy audits, expertise, funding, bulk purchasing of energy-efficient goods, training and education, and data

evaluation. SHSC manages and provides investment advice to housing providers on capital reserves valued at more than $390

million. Working closely with other housing sector organizations and non-governmental organizations, SHSC also supports and

develops independent housing-related research, including a new Housing Internship program for graduate-level researchers.

[edit]British Columbia

Recently there has been a move toward the integration of affordable social housing with market housing and other uses, such as

the 2006-10 redevelopment of theWoodward's building site in Vancouver.

[edit]China

China is also experiencing a gap between housing price and affordability as it moves away from an in-kind welfare benefit

system to a market-oriented allocation system (Huiet al. 2007). Most urban housing prior to 1978 in the planned-economy era

consisted of nearly free dwellings which were produced and allocated by the unsustainable single-channel state-funded system.

[33]

Challenges in providing affordable housing in China through the free market system are similar to difficulties in many Western

countries. Potential purchasers lack wealth to purchase dwelling units and lack income to make regular mortgage payments. In

response China introduced the Housing Provident Fund (HPF) program nationwide in 1995. It is similar to housing fund

programs in other countries such as Thailand and Singapore. The Housing Provident Fund (HPF), provides a mechanism

allowing potential purchasers who have an income to save for and eventually purchase a unit dwelling (which may be a formerly

public housing unit). The HPF includes a sunsidized savings program linked to a retirement account, subsidized mortgage rates

and price discounts. The Chinese government has embarked upon an effort to reduce the number of tenants living in publicly

owned housing. In the second system, individuals privately own housing and trade it within a free market. During the past two

decades the Chinese government has implemented a series of policies designed to privatize government owned housing.[52]

In 1998 China accelerated its urban housing reform further moving away from an in-kind welfare benefit system to a market-

oriented allocation system, with the state reducing its role in housing provision. As a result, in cities like Shanghai for example,

with housing construction lagging behind the demand, houses prices increased significantly widening the gap between housing

price and affordability.[33] Acute situation of housing supply in rapidly increasing urban areas like Shanghai did not improve with

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growth in income.[53] Following the skyrocketing of real estate prices major cities in China in early 2005, the Chinese cabinet

cracked down on speculation and issued regulations regarding down payments while raising mortgage rates and the Central

Bank interest rates to cool the over-heated market.[53]

China's leading industrial centre is Shanghai. With a population of 13 million [2005], it is the largest city in China. The real estate

market value accounts for 22% of China's total real estate market making and also the most expensive housing market in China

(Chen 2007).[53]

[edit]India

InIndia, it is estimated that in 2009-10, approximately 32% of the population was living below the poverty line[54] and there is

huge demand for affordable housing. Some developers are developinglow cost and affordable housing for this population. The

Government of India has taken up various initiatives for developing properties in low cost and affordable segment.They have

also looked at PPP model for development of these properties.

[edit]United Kingdom

Main article:Affordability of housing in the United Kingdom

The British housing market in the late 1980s and early 1990s experienced an almost unprecedented set of changes and

pressures. A combination of circumstances produced the crisis, including changes in demography, income distribution, housing

supply and tenure, but financial deregulation was particularly important. Housing affordability became a significant policy issue

when the impact on the normal functioning of the owner occupied market became severe and when macro-economic feedback

effects were perceived as serious. A number of specific policy changes resulted from this crisis, some of which may prove to be

enduring. Many of these revolve around the ability or otherwise of people to afford housing, whether as would-be buyers priced

out of the boom, recent buyers losing their home through mortgage default or trapped by 'negative equity', or tenants affected by

deregulation and much higher rent levels.[55]

[edit]A tradition of social housing in the United Kingdom

The United Kingdom has a long tradition of promoting affordablesocial rented housing. This may be owned bylocal

councilsorhousing associations. There are also a range of affordable home ownership options, includingshared

ownership(where a tenant rents part share in the property from a social landlord, and owns the remainder). The government

has also attempted to promote the supply ofowner occupied affordable stock for purchase, principally by using theland-use

planning system to require that housing developers provide a proportion of lower cost housing within new developments.[56] This

approach is commonly known asinclusionary zoningand the current mechanism for securing the provision of affordable housing

as part of a planning application for new housing development is through the use of aS.106 Agreement. In Scotland the

equivalent is aSection 75 planning agreement. (Section 75 of the Town and Country Planning (Scotland) Act 1997)

[edit]Council houses

Main article: Council house

A high proportion of homes in the UK were previously council-owned, but the numbers have been reduced since the early 1980s

due to initiatives of theThatcher governmentthat restricted council housing construction and provided financial and policy

support to other forms social housing. In 1980, the Conservativegovernment ofMargaret Thatcherintroduced the Right to

Buyscheme, offering council tenants the opportunity to purchase their housing at a discount of up to 60% (70% on leasehold

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homes such as flats). Alongside Right to Buy, council-owned stock was further diminished as properties were transferred to

housing associations. Council Tenants in some instances have chosen to transfer management of the properties toarms-length

non-profit organisations. The tenants still remained Council tenants, and the housing stock still remained the property of the

Council. This change in management was encouraged by extra funding from central government to invest in the housing stock

under the Decent Homes Programme. The program required council housing to be brought up to a set standard was combined

with restrictions on the amounts that councils could borrow and led to an increase in such arms length management

organisations being set up. In some areas, significant numbers of council houses were demolished as part ofurban

regenerationprogrammes, due to the poor quality of stock, low levels of demand and social problems.

In rural areas where local wages are low and house prices are higher (especially in regions with holiday homes), there are

special problems. Planning restrictions severely limit rural development, but if there is evidence of need then exception sites can

be used for people with a local connection. This evidence is normally provided by a housing Needs survey carried out by a Rura

Housing Enabler working for the local Rural Community Council.

Housing associations are not-for-profit organisations with a history that goes back before the start of the 20th century. The

number of homes under their ownership grew significantly from the 1980s as successive governments sought to make them the

principal form of social housing, in preference to local authorities. Many of the homes previously under the ownership of local

authorities have been transferred to newly established housing associations, including some of the largest in the country.

Despite being not-for-profit organisations, housing association rents are typically higher than for council housing. Renting a

home through a housing association can in some circumstances prove costlier than purchasing a similar property through a

mortgage.

All majorhousing associations are registered with the Homes and Communities Agency who are responsible for the regulation

of social housing from 1 April 2012.[57]Housing associations that are registered were known as Registered Social Landlords from

1996, but in the Housing and Regeneration Act 2008 the official term became Registered Providers; the latter also

covers council housingas well as developers and other bodies which may receive grants for development.[58]:3 The Department

for Communities and Local Government sets the policy for housing in England. In Scotland policy is set by the Scottish

Parliament; inspecting and regulating activities falls to the Scottish Housing Regulator.[59] Social housing in Northern Ireland is

regulated by the Northern Ireland Housing Executive, which was established to take on ownership of former council stock and

prevent sectarian allocation of housing to people from one religion.

[edit]United States

U.S. Federal Housing Budget 1976-2007

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The federal government in the U.S. provides subsidies to make housing more affordable. Financial assistance is provided for

homeowners through the mortgage interesttax deduction and for lower income households through housing subsidy programs.

In the 1970s the federal government spent similar amounts on tax reductions for homeowners as it did on subsidies for low-

income housing. However, by 2005, tax reductions had risen to $120 billion per year, representing nearly 80 percent of all

federal housing assistance.[60]The Advisory Panel on Federal Tax Reform forPresident Bushproposed reducing thehome

mortgage interest deduction in a 2005 report.[61]

Housing assistance from the federal government for lower income households can be divided into three parts:

Tenant based subsidies given to an individual household, known as theSection 8 program

Project based subsidies given to the owner of housing units that must be rented to lower income households at

affordable rates, and

Public Housing, which is usually owned and operated by the government. (Some public housing projects are managed

by subcontracted private agencies.)

Project based subsidies are also known by their section of the U.S. Housing Act or the Housing Act of 1949, and includeSection 8, Section 236, Section 221(d)(3), Section 202 for elderly households, Section 515 for rural renters, Section 514/516 for

farmworkers and Section 811 for people with disabilities. There are also housing subsidies through the Section 8 program that

are project based. The United States Department of Housing and Urban Development (HUD) and USDARural

Developmentadminister these programs. HUD and USDA Rural Development programs have ceased to produce large numbers

of units since the 1980s. Since 1986, the Low-Income Housing Tax Creditprogram has been the primary federal program to

produce affordable units; however, the housing produced in this program is less affordable than the former HUD programs.

One of the most unique US public housing initiatives was the development of subsidized middle-class housing during the

late New Deal (194042) under the auspices of theMutual Ownership Defense Housing Divisionof theFederal Works

Agency under the direction ofColonel Lawrence Westbrook. These eight projects were purchased by the residents after

the Second World Warand as of 2009 seven of the projects continue to operate as mutual housing corporations owned by their

residents. These projects are among the very few definitive success stories in the history of the US public housing effort.

In the U.S., households are commonly defined in terms of the amount ofrealized income they earn relative to theArea Median

Income or AMI.[62] Localized AMI figures are calculated annually based on a survey of comparably-sized households within

geographic ranges known as metropolitan statistical areas, as defined by the US Office of Management and Budget.[63] For U.S.

housing subsidies, households are categorized by federal law as follows:[64]

Moderate income households earn between 80% and 120% of AMI.

Low income households earn between 50% and 80% of AMI.

Very low income households earn no more than 50% of AMI.

Some states and cities in the United States operate a variety of affordable housing programs, including supportive housing

programs, transitional housing programs and rent subsidies as part of public assistance programs. Local and state governments

can adapt these income limits when administering local affordable housing programs; however, U.S. federal programs must

http://en.wikipedia.org/wiki/Mortgage_interesthttp://en.wikipedia.org/wiki/Tax_deductionhttp://en.wikipedia.org/wiki/Tax_deductionhttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-changing_priorities-60http://en.wikipedia.org/wiki/Affordable_housing#cite_note-changing_priorities-60http://en.wikipedia.org/wiki/George_W._Bushhttp://en.wikipedia.org/wiki/George_W._Bushhttp://en.wikipedia.org/wiki/Home_mortgage_interest_deductionhttp://en.wikipedia.org/wiki/Home_mortgage_interest_deductionhttp://en.wikipedia.org/wiki/Home_mortgage_interest_deductionhttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titlePresidents_Advisory_Panel_on_Federal_Tax_Reform-61http://en.wikipedia.org/wiki/Section_8_(housing)http://en.wikipedia.org/wiki/Section_8_(housing)http://en.wikipedia.org/wiki/Public_housing_in_the_United_States_and_Canadahttp://en.wikipedia.org/wiki/Public_housing_in_the_United_States_and_Canadahttp://en.wikipedia.org/wiki/Housing_Act_of_1949http://en.wikipedia.org/wiki/Housing_Act_of_1949http://en.wikipedia.org/wiki/United_States_Department_of_Housing_and_Urban_Developmenthttp://en.wikipedia.org/wiki/Rural_Developmenthttp://en.wikipedia.org/wiki/Rural_Developmenthttp://en.wikipedia.org/wiki/Rural_Developmenthttp://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credithttp://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credithttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Mutual_Ownership_Defense_Housing_Divisionhttp://en.wikipedia.org/wiki/Mutual_Ownership_Defense_Housing_Divisionhttp://en.wikipedia.org/wiki/Federal_Works_Agencyhttp://en.wikipedia.org/wiki/Federal_Works_Agencyhttp://en.wikipedia.org/wiki/Federal_Works_Agencyhttp://en.wikipedia.org/wiki/Colonel_Lawrence_Westbrookhttp://en.wikipedia.org/wiki/Colonel_Lawrence_Westbrookhttp://en.wikipedia.org/wiki/Colonel_Lawrence_Westbrookhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Realization_(finance)http://en.wikipedia.org/wiki/Realization_(finance)http://en.wikipedia.org/wiki/Household_income_in_the_United_Stateshttp://en.wikipedia.org/wiki/Household_income_in_the_United_Stateshttp://en.wikipedia.org/wiki/Household_income_in_the_United_Stateshttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titleInitiative_for_Affordable_Housing_-_Glossary-62http://en.wikipedia.org/wiki/Affordable_housing#cite_note-titleInitiative_for_Affordable_Housing_-_Glossary-62http://en.wikipedia.org/wiki/Metropolitan_statistical_areashttp://en.wikipedia.org/wiki/Metropolitan_statistical_areashttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titleMetropolitan_and_Micropolitan_Statistical_Areas-63http://en.wikipedia.org/wiki/Affordable_housing#cite_note-titlePublic_Housing.2FSection_8_Income_Limits_for_FY_1999-64http://en.wikipedia.org/wiki/Low_income_householdshttp://en.wikipedia.org/wiki/Mortgage_interesthttp://en.wikipedia.org/wiki/Tax_deductionhttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-changing_priorities-60http://en.wikipedia.org/wiki/George_W._Bushhttp://en.wikipedia.org/wiki/Home_mortgage_interest_deductionhttp://en.wikipedia.org/wiki/Home_mortgage_interest_deductionhttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titlePresidents_Advisory_Panel_on_Federal_Tax_Reform-61http://en.wikipedia.org/wiki/Section_8_(housing)http://en.wikipedia.org/wiki/Public_housing_in_the_United_States_and_Canadahttp://en.wikipedia.org/wiki/Housing_Act_of_1949http://en.wikipedia.org/wiki/United_States_Department_of_Housing_and_Urban_Developmenthttp://en.wikipedia.org/wiki/Rural_Developmenthttp://en.wikipedia.org/wiki/Rural_Developmenthttp://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credithttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Mutual_Ownership_Defense_Housing_Divisionhttp://en.wikipedia.org/wiki/Federal_Works_Agencyhttp://en.wikipedia.org/wiki/Federal_Works_Agencyhttp://en.wikipedia.org/wiki/Colonel_Lawrence_Westbrookhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Realization_(finance)http://en.wikipedia.org/wiki/Household_income_in_the_United_Stateshttp://en.wikipedia.org/wiki/Household_income_in_the_United_Stateshttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titleInitiative_for_Affordable_Housing_-_Glossary-62http://en.wikipedia.org/wiki/Metropolitan_statistical_areashttp://en.wikipedia.org/wiki/Affordable_housing#cite_note-titleMetropolitan_and_Micropolitan_Statistical_Areas-63http://en.wikipedia.org/wiki/Affordable_housing#cite_note-titlePublic_Housing.2FSection_8_Income_Limits_for_FY_1999-64http://en.wikipedia.org/wiki/Low_income_households

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adhere to the definitions above. For the Section 8 voucher program, the maximum household contribution to rent can be as high

as 40% gross income.[65]

Distribution of U.S. Median Home Values

Comprehensive data for the most affordable and least affordable places in the U.S. is published each year by an affordable

housing non-profit organization, the National Low Income Housing Coalition.[66]The NLIHC promotes a guideline of 30% of

household income as the upper limit of affordability. According to a 2012 National Low Income Housing Coalition report, in every

community across the United States "rents are unaffordable to full-time working people." [67]

However, by using an indicator, such as the Median Multiple indicator[68]which rates affordability of housing by dividing the

median house price by gross [before tax] annual median household income), without considering the extreme disparities

between the incomes ofhigh-net-worth individual (HNWI) and those in the lower quintiles, a distorted picture of real affordability

is created. Using this indicator which rates housing affordability on a scale of 0 to 5 with categories 3 and under being

affordable, in 2012 the United States overall market was considered to be 3 or affordable. [20]

Since 1996 while incomes in the upper quintile increased, incomes in the lower quintile households decreased creating negative

outcomes in housing affordability. [69]

Before thereal estate bubble of 2007, the median household paid $658 per month in total housing costs (Census 2002). [70] A

total of 20% of households were deemed to be living in unaffordable housing: Nine percent of all households are renters in

unaffordable housing,[71] and eleven percent of all households are homeowners with high housing costs.[72]

In the 2000 U.S. Census, the median homeowner with a mortgage (70% of homeowners and 48% of census respondents) spent

$1,088 each month, or 21.7% of household income, on housing costs.[73]The median homeowner without a mortgage (30% of al

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