Note:  What is shown below is a copy of the original letter, made for this website.  It is included here only so that the contents of the original letter can be searchable.  (The PDF received from the City is in the form of an image, and so is not a searchable document.)

Hello David,

“Affordable housing” is defined by the federal government as follows, per the California Housing
Consortium:

“According to the federal government, housing is “affordable” if it costs no more than 30% of
the monthly household income for rent and utilities. Most affordable housing developments
are built for families and individuals with incomes of 60% or less than the area median income
(AMI).”

Is this also how “affordable housing” is defined in the Gateway Area Plan? If not, please send to me
the definition of “affordable housing” as used and referred to in the Gateway Area Plan.

Thanks for your help with this.

Best regards,
Bruce LeBel

Arcata, CA 95521

From: David Loya
To:
Cc: Community Development Mailing List
Subject: RE: “Affordable housing” definition in the GAP? Re: Displacement considerations in new City of Arcata policy
Date: Monday, February 13, 2023 11:22:50 AM
Attachments: image002.png

Hi Bruce,
I am working on a more in depth staff report and presentation to the PC and CC on this topic. I’ll give
a high-level synopsis here, but ask that you tune in to the discussion when it comes up (March or
April).
The term affordable in relation to housing has many definitions that are context specific. The
definition you cited below is a good starting point that is broad enough to encompass the starting
point for most situations. Unfortunately, there is not exact specific definition that will work in all
contexts.
The definition you cited can be used as a rule of thumb to determine if housing is affordable to a
household with a given income level. That is, you can sample a population of households and
compare their housing cost to their income and determine whether it meets the definition of
affordable. However, it is a bit misleading to then think that affordable housing in all uses means
that a household’s housing cost is 30% of their income.
In fact, in most cases where there is a covenant regulating rents (restricted affordable housing) to
serve a particular income group, in almost every case, those households are paying more than 30%
of their household income to housing costs. This is because rents in “affordable housing” projects, as
in housing that is restricted for means tested individuals, are based on averages. In restricted
affordable housing projects you would need to earn say 80% area median income or less to qualify
for the housing unit. This means, a household earning 50% AMI would qualify for the unit restricted
to 80% AMI.
The rent for an 80% AMI unit is “High HOME Rent”, which is set annually by HCD. They are paying a
fixed rate that has been determined by HCD to generally be considered affordable to a household
earning 65% of AMI (so, 30% of 65% of AMI adjusted for unit size). So, an individual household
earning less than that (our 50% AMI household from above) would be paying more than 30% of their
income in housing costs. (if you want to research this, see
https://www.hudexchange.info/programs/home/home-rent-limits/).
“Affordable housing” is used in the context of our Homeownership Program. These are programs
that require borrowers to earn no more than 80% AMI for their household size when they are
approved for the loan program. The homeownership program allows deviations of the rule to up to
39% of a household’s income in some instances for the “front end” housing costs. The front end
ratio does not include utilities. So, in the context of a homeownership program for low-income
households (those earning 80% AMI or less), almost every household is going to pay more than 30%
AMI. These are still considered “affordable housing” programs.
The Tenant Based Rental Assistance program (and I believe Section 8 programs) are designed to
ensure that the household is paying as close to 30% of their income on rent as possible. When the
rent standard is established it is based on a Part 5 Income Determination. Their income is recertified,
and the rent subsidy from these programs is reestablished periodically. So in the context of a TBRA
program, affordable housing is as close to 30% of household income as is possible.
I’ve shared these examples to show that any attempt at a reductionist definition of affordable
housing is fraught at best. Part of the confusion stems from using the same term for different
purposes. The definition you cited is intended as a measure as to whether an individual household
approximates a common definition of affordable housing. Using the term affordable housing as an
adjective about a project or a program, the term is context specific, but generally does not mean
that housing cost is 30% of income. And, when we use it to describe the market in general, (market
rate affordable housing) we need to qualify what income group we are anticipating the housing will
be affordable.
Having said all of that, I appreciate the feedback. We do need a better narrative in our plans about
what we mean when we say affordable housing. If we can’t provide an exact definition, we at least
need to provide a framework for understanding the complexity of the context. When there is a
specific programmatic use of the term, there are generally a series of criteria that are used to qualify
and quantify what is meant in that context.
Cheers,
David Loya (him)
Community Development Director
City of Arcata
p. 707-825-2045