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  • Eileen Zilch

Demystifying Affordable Housing: Key Terms You Need to Know



We understand: navigating the world of housing can sometimes feel like deciphering complex codes!


In this blog, the team at Community Catalysts aims to demystify the key terms that will empower you to better understand the landscape of affordable housing—both here in Livingston County, and beyond.


Affordable Housing


Let's start with the basics. ‘Affordable housing’ refers to housing units that are reasonably priced for individuals or families with incomes below the median for their area. These homes are designed to ensure a diverse range of people can access safe and comfortable living spaces without being financially burdened.


The United States Department of Housing and Development (HUD) defines affordable housing as “housing on which the occupant is paying no more than 30 percent of gross (pre-tax) income for housing costs, including utilities”.


In simple terms, rent is your monthly payment for the apartment, house, or condo in which you live. Utilities, the extra costs associated with maintaining your unit (water, electricity, and trash service), are separate from the cost of rent.


Altogether, your rent and utilities shouldn’t exceed 30% of your pre-tax income to be considered “affordable”.


Here’s an example:



To illustrate the dire need for affordable housing in Howell, MI, Realtor.com reports as of October 2023, the median listing home price in Livingston County was $417.5K, trending up 4.6% year-over-year.


Median Income


The median income is the midpoint of a community's income distribution. What does that mean? It means half of the households earn more, and half earn less than the ‘median income’.


For example: if the median household income in Town X was $154,500, then the local household would earn on average between $99,000 and $210,000.


Affordable housing initiatives like Community Catalysts often use this mathematical benchmark to determine eligibility for various programs and subsidies.


Low-Income Housing Tax Credit (LIHTC)


One of the key tools in the affordable housing toolbox, LIHTC encourages private investment in affordable housing.


Developers receive tax credits in exchange for providing affordable rental units. This program has been instrumental in creating a significant number of affordable housing units across the country, and incentivizes developers not to overlook affordable housing options in favor of pricing lower-earning families out of the growing housing market.


Section 8


You've probably heard of Section 8, but what does it really mean?


This federal program assists low-income individuals and families in affording housing in the private market. Participants receive vouchers to help cover a portion of their rent, making it more manageable and ensuring they have a safe place to call home.


Housing Choice Voucher Program


This is the formal name for the Section 8 program.


It allows voucher holders to choose their housing, be it an apartment, townhouse, or single-family home, as long as it meets program requirements. The Housing Choice Voucher Program provides flexibility and empowers individuals and families to find housing that suits their needs, rather than being placed in housing that is chosen based on convenience or expediency.


Public Housing


Public housing refers to government-owned properties rented to low-income individuals and families at a reduced rate.


Established as part of the New Deal in 1935, public housing was created to address the growing need for families recovering on the heels of the Great Depression to access lower cost housing options, regardless of their income level.


Managed by local housing authorities, these developments play a crucial role in providing affordable housing options. Public housing programs vary by county, and the specific eligibility criteria and regulations can differ. In many cases, residents of public housing pay a portion of their income as rent, with the remaining costs covered by government subsidies.


However, public housing has faced a host of challenges and criticisms, including concerns about the quality of the housing, concentration of poverty, and issues related to management and maintenance of homes designated as public housing.


Homeownership Assistance Programs


Affordable housing isn't just about renting; it's also about making homeownership accessible. Various programs offer down payment assistance, low-interest mortgages, and other support to help individuals and families achieve the dream of owning their own homes.


Community Land Trusts


Community Land Trusts (CLTs) are community-based organizations that hold land in trust to provide affordable housing options. By separating the ownership of the land from the home, CLTs can ensure homes remain affordable for generations.


Fair Housing Act


Enacted in 1968, the Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, or national origin.


Understanding this act is crucial for promoting inclusive and equitable housing practices, and something Community Catalysts is dedicated to uphold in all our projects and endeavors.


Housing Development


Housing development is a term that involves the construction or rehabilitation of residential properties. In the context of affordable housing, these developments are designed to meet the needs of low and moderate-income individuals and families, contributing to the overall supply of affordable homes in a given area.


In 2022, Community Catalysts launched Housing Catalysts to develop a S.M.A.R.T. (specific, measurable, achievable, relevant, and time-bound) work plan for the next 5-7 years that will lead to the development of significantly more affordable, attainable, and workforce housing in Livingston County.


Community Catalysts


Hey, that's us!


Community Catalysts is dedicated to catalyzing positive change in communities by advocating for and creating affordable housing solutions. We serve as a catalyst to our partners, and together we empower seniors, veterans, homeless and other low income people through quality affordable housing and services.


Before You Go…


Navigating the world of housing and affordable housing can be challenging, yes—but with a firm grasp of these key terms, you're well on your way to becoming a housing expert!


At Community Catalysts, we're committed to making housing accessible for all, and we hope this guide has empowered you to join us in creating vibrant and inclusive communities.


Remember, understanding these terms isn't just about what you know; it's about using that knowledge and building a foundation for a future where everyone has a place to belong.


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