What is Affordable Housing?
Housing is considered affordable when housing costs, including rent or a mortgage and utilities, make up no more than 30 percent of a household’s gross monthly …
Thanks for reading Chatham County’s leading news source! Please consider supporting community journalism by subscribing to the News + Record – you can do so by clicking here.
What is Affordable Housing?
Housing is considered affordable when housing costs, including rent or a mortgage and utilities, make up no more than 30 percent of a household’s gross monthly income. The term “affordable housing” is generally used to refer to housing for households who make 80 percent or less of the Area Median Income (AMI), which is defined by Housing & Urban Development for metropolitan statistical areas. Workforce housing is also often discussed, and in the Chatham County context, this term refers to housing that is affordable to households which make between 80 and 120 percent of the AMI.
Who does Affordable Housing serve?
Affordable housing serves many different types of people: Seniors who are on fixed-incomes often cannot afford increasing market-rate rents, and people who are dealing with chronic issues, like homelessness, mental health issues, or others who need the foundation of an affordable home to be able to successfully acquire and maintain employment or find stability in their lives.
Given the income inequality, wage stagnation, and rapidly rising housing costs in our region, many people who would qualify for affordable housing include workers like teachers, social workers, police officers, tradesmen, child care workers, bus drivers, retail clerks, and many more. These are people whose jobs play an essential role in serving Chatham County residents and providing the goods and services that they need.
A look at Cost-Burdened Households
A household is considered cost burdened if it spends more than 30 percent of its income on gross rent and utilities. This is particularly true for households with incomes less than 80 percent of AMI, because they have fewer resources left over to pay for transportation, food, health care, education, and other essentials that improve quality of life and increase opportunity. When looking at Census data for households by income range, this report used $50,000 or less as a rough equivalent to households making less than 80 percent of AMI.
In Chatham County, 41 percent of all renter households are cost burdened, and of renter households making less than $50,000, 66 percent (2,223) are cost burdened.
What’s the impact of lack of Affordable Housing?
Affordable housing has broad impacts on the individual, family, neighborhood, and community. When families cannot afford quality housing, they may end up living in substandard housing and/or spending more than 30 percent of their income on gross rent, thereby having less money to spend on healthcare, education, healthy foods, transportation to work, and other resources that improve quality of life and opportunity.
This impact includes:
• Health: Housing quality can have negative health impacts like asthma, falls and injuries, lead-poisoning, and depression and anxiety. Children and older adults are at a higher risk for these health outcomes.
• Education: Unstable housing or homelessness leads to stress and difficult learning, which leads to disrupted school attendance, resulting in poorer school performance.
• Local Economy: The development of affordable housing can benefit the local economy. Every 100 typical low-income housing tax credit apartment units generate $7.9 million in local income in the first year, then $2.4 million annually; 122 local jobs in the first year, 30 jobs a year ongoing; $827,000 in taxes the first year, then $441,000 annually. (In this case, taxes equate to local government revenue from all sources: taxes, fees, fines, revenue from government-owned enterprises.)
Older Adults in Chatham County
By 2034, the population of adults 65 years and older will increase by 94.1 percent, from 15,189 to 29,475. In 2015, 22 percent of Chatham’s population was 65 years and older. By 2034, 32 percent of Chatham’s population will be 65 years and older. The proportion of older adults in Chatham today is almost twice as high as other local counties like Durham, Wake, Johnston, and Orange. There is already a great need for affordable housing for older adults, and it will continue to increase as the population ages and as their housing needs change. As older adults’ homes get older, maintenance needs will become more prevalent. As new housing is built, the needs of this aging population should be taken into account. Housing could be built near resources to facilitate aging in community and maintaining independence for adults who no longer want to or are able to drive. Compared to the total population, a higher percentage of older adult households are low income, cost burdened, white, live alone, and have a disability.
Key data regarding Affordable Housing in Chatham County:
• Forty-nine percent of renter households are making less than 30 percent of AMI. About 2,223 (66 percent) of renter households are making less than 80 percent of the AMI and are cost-burdened.
• There are not enough rental units for low-income households, especially extremely low-income households. It is estimated there are 1,404 renter households making 30 percent or less of AMI, but only 335 rental units affordable to households making 30 percent or less of AMI.
• There is an estimated gap of 1,995 affordable rental units in Chatham. The majority of this gap is found in the lack of rental housing for households making between 0 and 30 percent of AMI.
• There is a disparity in the number of bedrooms in rental units and the number of people in renter households. Thirty-nine percent of renter households are one-person households, yet only 16 percent of rental units are one-bedroom or studios. A unit with fewer bedrooms is more affordable, so the inventory does not cater to low-income smaller households. Conversely, while 46 percent of market-rate units have three or more bedrooms, there are few naturally occurring affordable housing units with at least three bedrooms.
• Chatham County’s demographics pose an equity issue in the affordable housing dialogue. Older adult households have a lower median income than the general population. White households’ median income is more than twice that of black households and of Hispanic or Latino households. This suggests there may need to be different strategies for different populations.
• The H&T Index estimates that the typical household in Chatham County spends 32 percent of their income on housing and 28 percent on transportation, totaling to 60 percent of its income. This is much higher than the recommended threshold of 45 percent.
The fact that there is a high percentage of low-income renter households is exacerbated by the fact that rents are high and quality rental housing is sparse.
In Chatham County, there are not enough affordable units given the number of low-income households. It is estimated there are 1,404 renter households making 30 percent or less of AMI, but only 335 rental units affordable to households making 30 percent or less of AMI.
Chatham County has a total population of 67,431 people and 26,923 households. Renters make up 22 percent of all households. The overall median household income is $55,642, but the median renter household income is just $30,742. Eighty percent of the housing stock is single-family homes, and another 15 percent are mobile homes. While this is typical for a rural county, there is still a disparity between number of bedrooms available and household sizes.
Housing Committee Goals
With these issues in mind, the Housing Committee identified seven goals, listed below. They encompass both a housing focus and a people focus, acknowledging that the availability of quality affordable housing is just one element of addressing the issue; equity, income disparities, and access to resources are important as well.
• Increase the number and diversity of affordable rental options
• Preserve existing legally-binding affordable housing
• Preserve naturally occurring affordable housing (NOAH)
• Ensure rental quality
• Support low-income renters
• Foster healthy communities
• Improve economic mobility and equity
Source: 2017 Affordable Rental Housing Report & Strategy Toolbox, produced by the Triangle J Council of Governments; Chatham Housing Committee; CN+R research