This primer tackles one of the most perplexing problems in the affordable housing field: How much should a family pay for housing? The operative word is should. Replace should with can, and the question gets answered in an entirely different way, because what a family can afford for housing (the amount that can be wrung out of a limited budget) is not necessarily what that family should be paying. As families pay more for housing than they should, less money is available for education, job training, transportation to employment, and other necessities that can lift a family into a higher standard of living.
The most common rule of thumb for housing affordability is 30% of income. But this rule does not take into account a family’s certain and specific realities, such as medical needs and family size to name two. As the paper shows, the 30% rule of thumb does have one powerful argument on its side. It has been around so long and is so easy to apply that it has achieved widespread recognition if not acceptance. A more nuanced set of guidelines is needed now.
The conclusion reached is that while the 30% guideline is easy to understand and widely applied, in many cases, it simply does not work (by itself) well enough for enough families. We must be able to supplement and nuance the 30% percent rule of thumb with other criteria and guidelines, including the use of a continuous or categorical HCIR, that enable us to define housing affordability more accurately and reliably for any given family.