MAKING HOUSING AFFORDABLE AND EQUITABLE
There are two basic ways housing is subsidized to make it affordable for individuals and families with low incomes. One way is to financially support the monthly rent paid to a landlord using a ‘voucher system’. This type of voucher system directly pays the landlord. The tenant pays 30 percent of income for rent and the voucher pays the remaining rent to meet the fair market value of property. The most notable example is the Section 8 voucher program. The subsidy equals out the fair market price by paying a portion of the rent for the family. Another way is to build/develop housing stock which is specifically financed to support rent that is based on income of family. Construction and rehabilitation costs for the property is subsidized using a variety of methods – grants, low interest loans, tax credits. Often this development is subsidized directly by the local, state, and federal government. The best example of such housing stock is public housing projects.
Each method of subsidizing affordable housing has benefits and drawbacks. The development of affordable housing stock often uses large complex development to help keep construction costs down. This allows the cost of development and maintenance to be more manageable, however it creates blocks of low-income neighborhoods. The positive consequence of developing housing projects is that the housing stays affordable regardless of what family or individual resides in the unit. Unfortunately, research has been demonstrating the direct negative health consequences of living in economically poorer neighborhoods. This was one of the reasons Lexington revamped the public housing complexes off Georgetown street and Race street in the early 2000s. Of course, this led to a big loss of affordable housing stock which has yet to be fully replaced. Housing voucher programs allow individuals to have access to housing units in neighborhoods and areas that are income mixed. This often offers greater neighborhood resources for low-income families; thus, vouchers help to equalize resources. At same time, the unit is affordable only if the family with voucher stays in the unit. The cost of the unit itself is beyond the income of families living below the median income for the area. Gleanings hopes to develop affordable housing that experiences benefit of both methods without some of the drawbacks. Gleanings vision of scattered site affordable housing seeks to develop affordable units in neighborhoods and areas that offer mixed income/mixed use – creating increased housing equity. While also creating housing stock itself – so the housing stays affordable regardless of the family in the unit.
(If you desire more information or clarification, here are some links to articles providing more in-depth information.)
https://housingmatters.urban.org/articles/role-housing-choice-vouchers-addressing-americas-rental-housing-crisis