Why Affordable Housing?
WATCH members want to make sure there are choices for families who otherwise don’t have many options in today’s housing market. WATCH believes that families of all incomes deserve decent housing that meets their budget. However, the current market fails to provide adequate housing at a price many Waltham families are able to afford.
The need for affordable housing in Waltham (and in all of our neighboring communities) is great. According to the City’s 2007 Community Development Plan, 46% of households in Waltham make less than 80% of the area median income (such as $64,200 a year for a family of four) and thereby are eligible for affordable housing. That is 10,566 low- and moderate-income households! Yet in 2010 – even in the ongoing recession – the median sales price of single-family homes sold in Waltham was $385,000, requiring an income of at least $90,000. Plus, over 5,000 households are on the Housing Authority waiting list for public rental housing. Clearly there is a great need for more affordable housing to meet the needs of current Waltham residents.
There are no other developers looking to address this segment of the Waltham real estate market, so WATCH’s work to advance the creation of affordable homes in our city is filling an essential niche in providing housing choices for Waltham residents.
What is Affordable Housing?
Housing is considered to be affordable if its total costs (rent or mortgage, plus utilities, taxes, insurance, etc.) are no more than 30% of a household’s gross income. Typically, the phrase “affordable housing” means any housing where the total housing costs are affordable (cost no more than 30% of income) for a family that earns no more than 80% of the Area Median Income (AMI). Currently in Greater Boston, 80% of AMI for a family of 2 is $55,800 and for a family 4 is $69,700. This family of four cannot afford to spend more than $1,742.50 per month on housing. The 80% figure is just an upper limit, though. Many families in Waltham earn much less than this. 30% of Waltham families earn less than $35,000 a year. Yet to afford the average 2-bedroom apartment in Waltham, you need an income of at least $50,000 a year.
The phrase ‘Affordable Housing’ is often used when referring to any of 4 basic types of housing:
1) Private, subsidized affordable housing is privately developed, owned and operated, and is often created by a private non-profit organization that has a mission to provide affordable housing, like WATCH. Creating affordable housing in this way generally requires a combination of government funding, grants and low interest loans to bridge the gap between the high costs of creating housing and the rent or mortgage the tenants or owners can afford. Especially when these developments are built by nonprofit organizations, decisions at each development are driven by people’s need for housing and not by a profit-maximizing bottom line. Such properties are deed restricted to keeps rents or mortgage payments affordable for the long-term.
Some privately developed affordable housing is created by for profit companies, often as part of a mandated program to create affordable housing. When a for-profit company creates affordable housing, it usually receives some benefit in return, such as zoning relief, increased density or subsidy funds.
2) Public housing, home to about 1.3 million families nationwide, is owned by the federal or state government and managed by local Housing Authorities who report to HUD. To apply, families must have incomes at or below 50% of the area median income (AMI). Rents are set at 30% of a family’s income. The Waltham Housing Authority is responsible for 810 units of public housing for families and seniors in Waltham. Most of the affordable housing built in the United States prior to the 1970’s was public housing, however, since 1978 very little public housing has been built.
3) Section 8, a federal program that is also managed by the local Housing Authority. Low-income families 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. Massachusetts also runs a program similar to the federal one called MRVP, Massachusetts Rental Voucher Program.
4) Private, unsubsidized housing is housing owned by a landlord who charges moderate rents, while still earning a fair profit on his/her investment. Places like this often permanently lose their affordability when the landlord decides to significantly increase rents, sell the property or convert to condos. There are also no quality controls, so if a landlord does not keep up their property, the rents may be affordable, but the conditions of the apartment may not meet common expectations of decency.
What can I do about it?
WATCH addresses the housing crisis on many fronts: We identify sites for affordable housing, and organize support when a development opportunity arise in Waltham. We also educate the community about the issue and organize for policies that would help create more affordable housing. You can join our affordable housing committee to focus on these approaches. To learn more, contact us at 781-891-6689 x206.