What Do You Mean By "Affordable" Housing?

There is often confusion among people about the term "affordable housing," and what it applies to. While affordable housing covers many different income levels and price ranges, what makes housing "affordable" is the ratio of housing costs to household income.

There is often confusion among people about the term "affordable housing," and what it applies to. While affordable housing covers many different income levels and price ranges, what makes housing "affordable" is the ratio of housing costs to household income.

What is affordable housing?
Housing is "affordable" if the people living there pay no more than 30% of their income towards the rent or mortgage. So, what's affordable depends on the income level of a household.

Who is affordable housing for?
Affordable housing is typically aimed at low and moderate income households that are burdened by the high housing costs in Los Angeles County. Low and moderate income households earn between 50 to 120 percent of the area median income (AMI), and often pay half of their income towards housing.

What is area median income?
Each year, the federal government calculates the median income for communities across the country to use as guidelines for federal housing programs. Area median incomes are set according family size. In Los Angeles County, the median income for a family of four is $55,100/year.

How does income compare to rent?
In Los Angeles a decent one-bedroom apartment rents for about $1,200/month. This rent is affordable to someone earning $23/hour ($48,000/yr) or more. An $800/month apartment is affordable to someone earning around $15/hour ($32,000/year). A $1,400/month apartment is affordable to someone earning $27/hour ($56,000/year).

Why do we need to build more affordable housing?
Clearly, many people do not earn enough to afford the rents in Los Angeles. In addition to the existing need for more affordable housing, the Southern California Association of Governments estimates that about half of new housing need for the City of Los Angeles is for households earning below 80% percent of median income.

Some of the people working full-time earning 50-80% of the median income include grocery store cashiers, nurse's aides, security officers, janitors, truck drivers, sales agents, bookkeepers, fast-food employees, garment workers, data entry clerks and telemarketers.

People working full-time and earning 80-100% of the median income include legal secretaries, bank tellers, firefighters and law enforcement officers, registered nurses, teachers and city clerks.

Who lives on 50% of the median income?*

• A single person working full-time earning a wage of $10/hour.
• A single parent with a child earning $1,980/month.
• A couple with one child earning $26,800/year.
• Two full-time minimum wage workers with two children earning $29,000/yr.

Who lives on 80% of the median income?*

• A single person working full time at about $16/hour.
• A single parent with one child earning $3,200/month.
• A couple with one child earning about $42,800/year.

Who lives on 100% of the median income?*

• A single person earning $18.50/hour.
• A couple with no children earning $3,675/month.
• A single parent with two children earning $49,600/year.
• A couple with two children earning $55,100/year.

Who lives on 120% of the median income?*

• A single person earning working full time earning about $22/hour.
• A single parent with one child earning $4,400/month.
• A couple with one child earning $59,500/year.
• A couple with two children earning $66,000/year.

*Feb 2004