Part 5 - What is Affordable Housing?

The US Department of Housing and Urban Development defines Affordable Housing as: “In general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities.”   Although the term is often used without reference to income level to mean housing subsidized for those who cannot pay market rates, technically “Affordable Housing” covers a full range of housing costs.  At whatever income level, households paying more than 30% of gross income for housing are considered to be “overpaying."   

With this definition, data from the Census in Albany's Housing Element suggest that almost half of Albany’s  households overpay.  Overpayment has more serious consequences for lower income households because there is less money remaining for other expenses such as food, health care, and transportation. Usually, higher income households still have enough money to pay for other needs even when they overpay.  In Albany, overpayment affects about 20% percent of those earning over $75,000 a year, and over 70% of those earning less than $75,000 a year. This is indicative of the relatively high cost of housing here and in many other Bay Area communities.

Income Levels of Albany Households – Census data

With income level a key component of the term affordable housing, Albany's Housing Element uses the US Census, American Community Survey, 2007-2011 as the source of Albany households’ incomes.  The median (half have more, half have less) is $72,479.  The distribution is in rough thirds:

   35% less than $50,000

   29% $50,000 - $100,000

   36% more than $100,000

8.5% of the households in Albany, approximately 630, live below the federal poverty level.  Half of those below the federal poverty level rent in UC Village and may have funding sources other than income (such as scholarships or graduate fellowships).   Federal poverty levels in 2014 are delineated by household size:

  Family size    Poverty Guideline

          1               $11,670  

          2               $15,730

          3               $19,790

          4               $23,850

Affordable Housing Stock in Albany

Albany is a built-out town with very few vacant lots and high housing demand.  The laws of economics apply, driving housing purchase prices and rents higher in the face of more demand than supply.  With limited supply of housing for those with higher incomes, comparatively inexpensive housing is purchased and often remodeled into higher cost housing.  Thus Albany’s supply of lower cost owned housing is gradually reduced.

About half of Albany's housing stock is rental.  Rental rates have increased substantially in the last several years.  Those renters with low incomes not only struggle to find housing they can afford, they struggle to retain housing as rents continue to increase.

For several years Albany has had an ”inclusionary” housing program to encourage development of housing affordable to those at lower income levels.  Since 1999, about 30 housing units that are considered affordable to below-moderate-income households were constructed, most rentals.  These include 10 “second units” whose size suggests this level of affordability, and 16 units at Creekside Apartments developed by a non-profit housing firm.  The remaining owned units were created under the City’s inclusionary ordinance at Villa de Albany on San Pablo Ave. 

More steps are anticipated for Albany to accommodate additional housing and especially housing for lower-income households. Look for our next article: Part 6 What are Albany's Policies and Actions to achieve Housing Production? 

Sources include Albany’s Jan 2014 Housing Element http://albany2035.org/wp-content/uploads/2013/03/Housing-Element-1-22-14-PZ.pdf,, the US Housing and Urban Development site for definition of affordable housing, at http://www.huduser.org/portal/glossary/glossary_a.html, and http://aspe.hhs.gov/poverty/14poverty.cfm with Federal Poverty guidelines.