GLOSSARY OF AFFORDABLE HOUSING TERMS 2009-2010
[Adopted from HDC, Seattle]
According to government standards, housing should cost no more than 30% of your total income, including utilities. Affordable rental housing usually has a maximum income limit of 60% of median income. In Tacoma, this equates to an annual income of $28,620 for one person or $37,780 for three persons. Homeownership programs generally allow up to 80% of median or $38,150 for one person or $49,050 for a three-person household. (Tacoma Housing Authority allows up to 60% of AMI for its homeownership program; and THA allows up to 60% in THA tax credit properties.)
Abbreviation for the U.S. Department of Housing and Urban Development.
A person who lacks a fixed and regular nighttime residence. The general public tends to think of “homeless” as persons living on the streets, whereas it can include persons living involuntarily with a friend or family member, living in a car, etc.—anyone without a fixed address.
Housing authorities are public corporations with boards appointed by the local government. Their mission is to provide affordable housing to low- and moderate-income people. In addition to public housing, housing authorities also provide other types of subsidized housing. The Tacoma Housing Authority provides low-income housing to more than 12,000 people in Tacoma through several programs including public housing subsidized by HUD, the HUD funded Single Resident Occupancy Program, the Tenant-Based Rental Assistance Program funded through HOME grants disbursed by the City of Tacoma, Tax Credit properties, and the federal HUD-subsidized Section 8 program.
The Pierce County Housing Authority serves over 2500 people.
Income limits for households to qualify for subsidized housing opportunities are based on the Area Median Income (AMI) for a family of four. In Tacoma-Pierce County the 2009-2010 AMI is $68,100. Specific household sizes are used to determine eligibility for each household.
Low-income: 80% or less of AMI = $54,500 for household of 4
Very-low-income: 50% or less of AMI = $34,050 for household of 4
Extremely-low-income: 30% or less of AMI = $20,450 for household of 4
Low Income Housing Tax Credit
Many for-profit and nonprofit-developed rental properties use these federal income tax credits. The Washington State Housing Finance Commission allocates these credits to developers to build or fix up low-income housing. Large corporations, institutions, pension funds, and insurance companies invest in the housing as a method to gain the tax credits and reduce their income tax obligations. These apartments serve residents below 60% of median income and must accept Section 8 vouchers.
Market Rate Rent
The prevailing monthly cost for rental housing. It is set by the landlord without restrictions.
This is a statistical number set at the level where half of all households have income above it and half below it. The U.S. Department of Housing and Urban Development Regional Economist calculates and publishes this median income data annually in the Federal Register. See the Washington State Median Income and Income Limit figures for 2009-2010, including the Tacoma area, at http://www.huduser.org/portal/datasets/il/il2009/st.odb.
A multi-family housing property that contains both market-rate units and subsidized units.
Nonprofit housing is developed by nonprofit corporations with a community board of directors and mission. Most housing developed by nonprofit developers is affordable with rents or prices below market-rate. Income generated from the housing is put back into the mission of the organization, rather than being distributed to stockholders or individual investors as would be the case in for-profit housing.
Nonprofit Housing Developer
A nonprofit organization with a mission that involves the creation, preservation, renovation, operation or maintenance of affordable housing.
This is a type of subsidy going to property owners to reduce the management, maintenance and utility costs of housing. It is needed for projects housing extremely low-income residents who can’t afford rents covering the actual costs of housing.
Rental apartments or ownership homes that provide individuals and families with a fixed street address and residence. Most housing is permanent.
Privately developed or for-profit housing
This housing rents or sells at market-rate and is developed and owned by for-profit individuals, partnerships, or corporations. Most housing in Tacoma is privately developed.
Project-Based Section 8 Housing:
This federal program initially pledged 20-year commitments of rent subsidy to developers of privately owned rental housing stock in the community to encourage them to build affordable housing. The program is subsidized and regulated by HUD.
Many Section 8 contracts have expired or will expire soon, and the property owners must now decide whether to renew their contract or leave the program (“opt out”). Most of these contracts are now renewed on a one-year basis. Projects with high risk of opting out typically have rents set by the Section 8 contract below the prevailing market rents for comparable units. Owners thus have an incentive to leave the program and convert their property to private market rentals.
Public housing is housing owned and run by a local housing authority under the oldest federal housing program—the Housing Act of 1937. To be eligible to live in public housing, you must be low income and meet certain other requirements. In most cases, rent including utilities can comprise no more than 30% of your income.
In Tacoma, the Tacoma Housing Authority owns and operates 673 units of public housing, as well as more than 300 units of mixed-finance housing that include public housing subsidies. They are currently redeveloping the Salishan neighborhood That will include approximately 300 more units of mixed-finance housing that include public housing subsidies.
Similarly, the Pierce County Housing Authority owns and operates 134 units of public housing and provides another 1100 units of affordable housing.
Section 8 Vouchers
This federal program is administered by the local housing authority. Eligible tenants receive vouchers they can use to help them pay for apartments in the private market.
Tacoma Housing Authority provides about 3500 And Pierce County Housing Authority about 2500 Section 8 housing vouchers.
Also called emergency housing. Provides temporary overnight living accommodations. Shelters often are not open during the day.
Single room occupancy units. The traditional SRO unit is a single room, usually less than 100 square feet, designed to accommodate one person. Amenities such as a bathroom, kitchen or common areas are located outside the unit and are shared with other residents. Many SROs can be found in renovated hotels. SRO housing serves a variety of people by providing three types of settings: 1) Emergency housing for homeless people, including the elderly. Occupancy is usually on a nightly or weekly basis. 2) Transitional housing for previously homeless or marginally housed persons, including older people, who are progressing to permanent housing. 3) Permanent housing for older people who will move to this setting and often live here until their death or until their increasing frailty forces them to move to a more supportive setting.
A generic term covering all federal, state or local government programs that reduce the cost of housing for low- and moderate-income residents. Housing can be subsidized in numerous ways—giving tenants a rent voucher, helping homebuyers with down payment assistance, reducing the interest on a mortgage, providing deferred loans to help developers acquire and develop property, giving tax credits to encourage investment in low- and moderate-income housing, authorizing tax-exempt bond authority to finance the housing, providing ongoing assistance to reduce the operating costs of housing, and others.
Public housing, project-based Section 8, Section 8 vouchers, tax credits, and the State Housing Trust Fund are all examples of subsidized housing. Subsidized housing can range from apartments for families to senior housing high-rises. Subsidized simply means that rents are reduced because of a particular government program. It has nothing to do with the quality, location or type of housing. In fact, the Tacoma Housing Authority’s Salishan neighborhood that includes subsidized housing has received local and national design awards.
Over the years, programs have been designed to help local housing authorities, for-profit developers and builders, nonprofit organizations and public development authorities provide low- cost housing. Unfortunately, the number of people needing subsidized housing is far greater than federal, state or local funding for these programs.
For the purposes of the Downtown (Tacoma) Mixed-Income Housing Task Force Report, the term subsidized housing refers to housing that is partially or wholly financed by funds administered by and/or provided by the City of Tacoma.
Combines affordable housing with individualized health, counseling and employment services for persons with mental illness, chemical dependency, chronic health problems, or other challenges. Generally it is transitional housing, but it can be permanent housing in cases such as a group home for persons with mental illness or developmental disabilities. Supportive housing is a solution to homelessness because it addresses its root causes by providing a proven, effective means of re-integrating families and individuals into the community by addressing their basic needs for housing and on-going support.
This housing provides stability for residents for a limited time period, usually two weeks to 24 months, to allow them to recover from a crisis such as homelessness or domestic violence before transitioning into permanent housing. Transitional housing often offers supportive services, which enable a person to transition to an independent living situation.
A “normal” market vacancy rate is generally considered to be 5%. This means supply and demand are somewhat in balance when the vacancy rate is 5%. Generally, in boom times vacancy rates fall; while in recessions, vacancy rates rise. (THA uses 3% as a “normal” vacancy rate.)