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What is Affordable Housing?

Housing affordability is based on the relationship between a resident's income and their housing costs. A traditional rule of thumb for determining if housing is affordable is to assess if the total cost of living in the home consumes no more than 30% of the residents' household income. 

For renters, housing costs consist of rent and utilities.  For owners, housing costs may consist of mortgage payments, homeowners insurance, property taxes, mortgage insurance premiums and utilities.  Some homeowner or condominium association fees are also often considered housing expenses because they cover the cost of services that are mandatory for living in the home, such as insurance. 

For many households, spending 30% of income is not affordable because their other expenses require more than 70% of their income. Each household has unique demands on income, such as child care or home health care assistance, that affect the portion of the income available for their housing expenses. Nevertheless, the 30% standard is still widely used in government programs, although many adjust the amount of income considered available to reflect individual household circumstances, such as the number of people living in the home.