Sexy affordable housing methodology clickbait

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So I wrote a three-part series on what “affordable housing” means at City Observatory. The first two are up today; the third will be up tomorrow.

Usually, I feel like I’m pretty decent at understanding what sounds interesting to normal people, as opposed to someone who reads suburban zoning codes for fun. (Whether I act on that understanding is a separate question.) But I am shocked – shocked – that there hasn’t been a groundswell of people clamoring to discuss this series on Twitter and at my local corner store.

Because this is gripping! Consider:

1. Everyone – and I mean everyone, from HUD to any affordable housing group you can think of – uses the same 30% ratio of housing costs to income to determine what “affordable” means.

2. That ratio is kind of bogus!

3. Because everyone uses this bogus ratio:

a. Reports about, say, “how much you have to earn to afford a two-bedroom in City X” are often pretty misleading.

b. “Affordable” rents set by inclusionary zoning ordinances or other subsidies for people at a given income may not actually be affordable for people at that income.

c. We may be encouraging people to live in places and pay quantities of money that don’t make sense for their budgets.

4. Some smart guy has already come up with an alternative, which we should probably go ahead and use.

Go tell your friends!

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4 thoughts on “Sexy affordable housing methodology clickbait

  1. Your series was very well written and reasoned. The only counterpoint (which you mention) is the simplicity of the percentage metrics, but in these days of powerful computers and accessible data sets, I don’t think it holds much water. How would we (the general citizenry) go about motivating government offices to start switching metrics? It seems definitely like the kind of thing that wouldn’t light up the twitterverse or get much traction as an online petition. Is it a matter of getting the people using the bad numbers to be aware of them, or is it a matter of getting legislative bodies to pass laws allowing agencies to use better numbers?

    1. Thanks! I think both things are an issue – the 30% ratio comes from HUD, but theoretically there shouldn’t be anything stopping advocates and researchers from using the residual figures.

  2. The benefit of using a ratio is that it’s applicable at multiple social classes. A middle-class family making $70,000 a year isn’t going to compute its ability to pay rent based on a minimum standard of living, as in the residual income approach. It’s so far from the poverty line that it will take the minimum for granted, and instead make tradeoffs based on personal preferences and local conditions. In that case, thinking in terms of percentages is completely right.

    1. The benefit of a fixed ratio for affordability is that it’s easy to calculate. It is possible to spend 50% or more on housing and still have a good standard of living, because they are substituting other expenses like transportation for housing costs, a perfectly rational decision. Or they may choose to purchase more house than they could otherwise “afford” in order to build equity or to anticipate future needs like starting a family. Percentages are arbitrary, but arguably all statistics are arbitrary.

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