Ordinance No. 20585 - Laserfiche WebLink

Home Browse Search

1.1.2 What is affordable housing? The terms "affordable" and "low-income" housing are often used interchangeably. These terms, however, have different meanings: • Affordable housing refers to a household's ability to find housing within its financial means. A number of indicators exist that can be used to determine whether housing is affordable. One indicator is cost burden: households that spend more than 30% of their income on housing and certain utilities are considered to experience cost burden.' Any household that pays more than 30% experiences cost burden and does not have affordable housing. Thus, affordable housing applies to all households in the community. • Low-income housing refers to housing for "low-income" households. HUD considers a household low-income if it earns 80% or less of median family income. In short, low-income housing is targeted at households that earn 80% or less of median family income. These definitions mean that any household can experience cost burden and that affordable housing applies to all households in an area. Low- income housing targets low-income households. In other words, a community can have a housing affordability problem that does not include only low-income households. Many (maybe most) households that experience cost burden are composed of people who have jobs. A household earning 80% of median family income in Eugene earns about $47,000 annually — or about $22.50 per hour for a full-time employee. Based on HUD affordability standards, the maximum affordable purchase price for a household earning $47,000 annually is about $141,000. In summary, any household can face housing affordability problems. Because they have more limited financial means, the incidence of cost burden is higher among low-income households. Statewide planning Goal 10 requires cities to adopt policies that encourage housing at price ranges commensurate with incomes. State land use policy does not distinguish 1 Cost burden is a concept used by HUD. Utilities included with housing cost include electricity, gas, and water, but do not include telephone expenses. All of the indicators ECO has reviewed, including cost burden, have limitations that can distort results. Cost burden does not consider the impact of household size or accumulated assets. As a result a single -person household with an annual income of $20,000 and accumulated assets of $500,000 would be in the same category as a family of seven with an annual income of $20,000 and no accumulated assets. Part 11 — Eugene Housing Needs Analysis ECONorthwest Page 13