Introduction to Affordable Housing

What is Affordable Housing?

Across the world, access to safe and affordable housing is considered a human right. Currently, access to affordable housing is reaching crisis levels in the Truckee-Tahoe region. But what exactly is affordable housing? Whether or not housing is affordable to a family or individual is based on more than just the cost of a house or apartment. Affordability also includes the accessibility of housing and the cost of housing relative to income. Additionally, as housing prices rise and accessibility falls, people overpay for housing, commute long distances to their jobs, and overcrowd existing housing units.

The US Department of Housing and Urban Development defines those who pay more than 30% of their income towards housing as “cost burdened” and those who pay more than 50% as “severely cost burdened”. Locally, 67% of residents are considered housing cost burdened and 26% are severely cost burdened. Nearly 60% of local workers commute in from outside the area while more than 45% of residents commute out to work. In the Truckee-North Lake Tahoe area, the percentage of households experiencing overcrowding is more than double that of comparable counties. Housing cost burden also disproportionately affects people of color, extremely low and very low income households.
For some individuals and families experiencing housing cost burdens, there are local, state and federal programs to help, like public housing, privately owned subsidized rentals, rent vouchers, down payment assistance programs, first time home buyer programs and more.

Eligibility for housing assistance programs is determined by household income compared to household size and the Area Median Income (AMI). AMI is the household income for the median household in the region. For a household of 4, Placer County’s AMI is $83,600 and Nevada County’s is $85,100. Most state and federal housing assistance is limited to those whose incomes fall into low (51-80% AMI), very-low (31-50% AMI) and extremely low (0-30% AMI) income brackets, and are limited programs that support those who are moderate income (81-120% AMI). Statewide, there is not a single county that has enough affordable housing units to meet the need!

A person working full time at California’s minimum wage of $10 per hour can afford $520 per month in housing costs. In Truckee-North Lake Tahoe, studios rent for $900 – $1,200 per month, which would be 52% of a minimum wage worker’s monthly income. There are very few below market rentals available in the area compared to the housing need. In this area, all of the subsidized rental complexes reported zero vacancies with 6 month to 2 year waiting times.

Even housing that is currently affordable is not guaranteed to stay that way. Deed-restricted affordable housing is units that have a use-restriction that limits the rent or purchase price and requires occupancy by low income housing for a set period of time. Outside of deed restrictions, affordably priced housing can rise with the market, pricing out residents. Currently, only 11.2% of the 4.2 million multifamily units in California are currently deed-restricted as affordable housing, and some of these units are at risk of conversion to market rate. Nearly 7% of the existing deed restricted affordable housing is at risk of conversion by 2021.

In Truckee-North Lake Tahoe, there are even housing cost issues for households that earn above moderate AMI. The median single family home price is around $540,000, nearly double what a family of four earning a median income could afford. To purchase a median home and not be cost burdened, household income must be at 193% AMI for Nevada County and 187% for Placer County. Households that fall in the 121% – 192% AMI bracket are not eligible for any state or federal housing assistance, but local groups like the Mountain Housing Council are working with nonprofits, jurisdictions, agencies, and businesses to address this “missing middle”. In Truckee and Eastern Placer County, The Martis Fund has invested $1.2 million into a down payment assistance program for local families who work in the Tahoe Truckee Unified School District boundaries and earn up to 180% AMI, which to date has housed 33 families.

Sources:
Mountain Housing Council
Truckee North Tahoe Regional Workforce Housing Needs Assessment
US Department of Housing and Urban Development, Affordable Housing
Habitat for Humanity California
California’s Housing Future: Challenges and Opportunities
Martis Fund Homebuyer Assistance Program