The Issues

Some Background on Affordable Housing

Affordable housing isn’t charity. It’s an investment
in people.

Affordable housing has a history as a hotly debated topic especially in communities around the New York metropolitan area and in high-cost housing markets across the United States, but this fact should be surprising. Affordable housing isn’t charity. It’s an investment in people – employees, parents, children, neighbors – without whom the state’s whole economy would suffer. Strong markets and strong communities need a diverse mix of households. And that calls for a supply of housing that low- and moderate-income people can afford.

In recent years, we have heard many myths about housing – that developing affordable housing raises school costs, lowers property values, or increases crime – dispelled based on the fact that there is no body of respected research to back them up. Meanwhile, the financial crisis has affected nearly everyone, placing the heaviest burden on the most vulnerable households: families on tight budgets, seniors on fixed incomes and people who are newly laid off or struggling to find a job. In today’s economic climate, smart policies, incentives, rigorous counseling efforts and well-designed loan products for homebuyers and affordable rental housing developers alike are essential to promoting a healthy communities.

Why is Affordable Housing So Important?

• People who provide the bulk of essential community services – teachers, police officers, fire fighters, hospital workers, laundry and restaurant workers – often cannot afford to live in the communities where they work. Lack of affordable housing forces families to move further from their place of work contributing to sprawl, traffic congestion, air pollution, and road maintenance costs that negatively affect the quality of life for all residents in the community.
• By providing affordable homes for workers, families, empty-nesters, young professionals and others, communities can increase their tax bases, lower their expenses and keep families strong. Residents of affordable homes have disposable income available after their rent or mortgage payment for other necessities so that they can support the local economy and take advantage of community services.

• Children in stable housing do better in school and are less likely to experience disruption in their education due to unwanted moves.

  Access to quality affordable housing also reduces exposure to stress, toxins and infectious disease which leads to well-documented improvements in both physical and mental health. Further studies have shown that when low- and moderate-income families pay a reasonable (less than 30% of their monthly income) rate for housing, this frees up funds to spend on health care and food and has a direct correlation to families benefiting from better nutrition. Read more about the health and educational benefits here.

• According to AARP, 89% of Americans want to stay in their homes as long as possible, hoping to age in familiar settings and communities. Taking steps to insure affordable options are available in spite of rising energy costs enables older adults to age in place. Aging in place is the most cost-effective model for care when programs are available to support this option and the health of a senior allows. In a region where space at senior living facilities is very limited, programs and housing options that will allow seniors to age in their neighborhoods and remain involved in their communities are crucial.
• There are many families and individuals living in public housing across the nation who are solidly employed and can move into stable homeownership with the right assistance, and when this happens there are profound benefits that extend to both the new homeowners and the communities that they join. HDF’s own post-purchase surveys have revealed that:
  

  66% of our clients who buy homes see one or more family member advance their education, 75% of eligible, unregistered voters had registered to vote after buying a home, and 57% report involvement in the community through homeowners associations, schools, religious groups or other local organizations.

How Real is the Need for Affordable Housing in Our Area?

Connecticut’s average rent has grown 6 times faster than the average renter’s income. With income also dropping, a family with the state’s median income can’t afford to purchase the average home.

• Connecticut’s renting households saw median household income drop to $33,556 in 2010 down from $35,465 in 2008, and while income fell, Connecticut’s “housing wage” – the wage needed to afford the rent for a typical 2BR apartment – was the 6th highest in the nation. The state-wide housing wage of $23.37/hour equates to nearly $49,000 annually, an average wage level that nearly half the state’s occupations fail to reach. While the housing wage is $23 statewide in Connecticut, Fairfield, Litchfield and Westchester Counties all have housing wages at or above $30/hour. More details available in National Low Income Housing Coalition (NLIHC)’s Out of Reach 2011 report.
• Individuals making Connecticut’s median household income of $65,686 (down from $68,055 in 2009) could not qualify to purchase a home in 112 of Connecticut’s 169 cities and towns. Individuals making town median incomes could not purchase the median sales price home in 96 cities and towns. Of the 75 towns and cities HDF serves in Connecticut, only 19 were affordable for the town median income earning household. Read more in the Partnership for Strong Communities 2011 CT Affordability Study.

  (Above right) The foreclosure crisis has left many homes abandoned throughout the state. Bridgeport, CT was hit especially hard, with its rising unemployment and poverty rates (nearly one-in-four residents are currently in poverty).

• Connecticut is second in the nation in income disparity: The top 20% of the state’s population enjoys an average income of $233,617. The bottom 20% lives on an average income of $13,969. One consequence of this is that we have witnessed distortions in the housing market that fuel the “affordability gap” for many Connecticut residents.
• HDF’s service area includes the second, seventh and ninth most expensive metro areas in the nation. Read more.

What Does HDF Bring to the Table?

No single organization can meet all the affordable housing needs in our four county service area. That’s why HDF does more than just help individual families and finance new developments and home purchases. We also help other nonprofits and developers serve more people, and we work with state and local governments to create a more fertile environment for affordable housing throughout the region.

For example, HDF was instrumental in assisting the community planning process to establish inclusionary zoning in both Stamford and Norwalk. These laws ensure that large new housing developments make 10% of units available to people of modest means – the bus drivers and teachers’ aids and office workers who make up the backbone of the state’s labor force. With inclusionary zoning in place, HDF helps developers meet the new standards by finding ready, qualified buyers for the new low-cost units.

We also help other nonprofits develop effective counseling and finance programs or design essential services for families finding their way in a difficult housing market. We furnish reliable information and innovative ideas to public and private leaders, helping them make smarter decisions that will boost the supply of critically needed affordable housing throughout the region.

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