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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 lof 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.
Do we need Affordable Housing in Medford?
In Medford there is a huge gap between our incomes and the cost of housing, which got larger as housing costs soared over the last several years. One third of our households earn less than $35,000 a year and can afford no more than $875 a month on housing; we all know that’s pretty hard to find! The average income earning family in Medford – at $56,644 a year – can afford around $1,400 a month on housing, but the average sales price in Medford of around $380,000 will cost them at least $2,100 a month to own.
What about the rest of Massachusetts?
In 2005, largely because of the high cost of housing, Greater Boston was ranked the most expensive metro area in the nation by the Economic Policy Institute. Rental prices in Massachusetts are the 3rd highest in the nation, after Hawaii and California, and ownership costs are similarly expensive.
The 2006 “Out of Reach” report by the National Low-Income Housing Coalition (NLIHC) found that to afford the "fair market rent" for a 2 bedroom apartment in the greater Boston area, a worker would need to earn at least $56,640 a year or $26.27 an hour in a full time job. A teacher with a few years’ experience in Medford might earn $22 an hour. A certified nurse’s assistant at Lawrence Memorial Hospital might earn $14 an hour.
It is estimated that there are over 11,000 families in Massachusetts without permanent housing, and on any given night, only about 1,400 of these can find space in a shelter.
And the rest of the nation?
Extreme housing costs are a problem nation-wide, especially in large cities and surrounding areas. Nationally, 5 - 10% of families experience homelessness annually - more than in any other industrialized nation.
Harvard's Joint Center for Housing Studies’ 2006 report found that between 2001 and 2004, the number of households paying more than half of their income on housing costs increased by 1.9 million - now 15.6 million low and moderate income households pay more than 50% of income on housing costs. Additionally, housing prices appreciated at a rate six times faster than income increases between 2000 and 2005 nationwide.
So what do people do who can't afford the cost?
Many people (including families in Medford) share small spaces with relatives or other families in order to afford the rent. Others live in apartments they may be able to afford, but with safety and health risks such as cockroaches, rats, broken windows, malfunctioning heating systems or appliances, leaking ceilings, faulty plumbing or in illegal units, such as spaces carved out of basements. Many other people are homeless, directly - and increasingly exclusively - because of the extreme gap between their very low wages and the very high cost of housing.
The following table shows the income limits for different types of federal programs. Upcoming affordable units in Medford use the 80% AMI income limit. To figure out if you would qualify for an affordable unit, find your household size on the left hand side. Then look over to the 80% AMI column. Your total annual household income (excluding income made by anyone under age 18) must be no more than this figure.
HUD ANNUAL INCOME LIMITS FOR AFFORDABLE HOUSING, 2007 |
Greater Boston Area |
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30% AMI |
50% AMI |
60% AMI |
70% AMI |
80% AMI |
95% AMI |
100% AMI |
Household of 1 |
17,770 |
29,450 |
35,340 |
40,513 |
46,300 |
55,955 |
58,900 |
Household of 2 |
20,200 |
33,650 |
40,380 |
46,331 |
52,950 |
63,935 |
67,300 |
Household of 3 |
22,750 |
37,850 |
45,420 |
52,106 |
59,550 |
71,915 |
75,700 |
Household of 4 |
25,250 |
42,050 |
50,460 |
57,881 |
66,150 |
79,895 |
84,100 |
Household of 5 |
27,250 |
45,400 |
54,480 |
62,519 |
71,450 |
86,260 |
90,800 |
Household of 6 |
29,300 |
48,800 |
58,560 |
67,156 |
76,750 |
92,720 |
97,600 |
AMI = Area Median Income
What do Employees in Medford earn?
The following are examples of what a Medford resident working in these positions might earn on an annual basis:
Position |
Annual Income |
% of AMI for a household of 3 |
Public School Teacher |
$40,000 |
under 60% |
City Police Officer |
$40,000 |
under 60% |
Taxi driver |
$35,000 |
under 50% |
Nurse’s Assistant, Lawrence Memorial Hospital |
$30,000 |
under 50% |
Administrative Assistant in law or doctor’s office |
$32,000 |
under 50% |
Bank Teller |
$30,000 |
under 50% |
Food Preparation Cook in local restaurant |
$21,000 |
under 30% |
Child Care worker |
$20,000 |
under 30% |
Clerk in store (such as Staples or BJ’s) |
$17,000 |
under 30% |
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