Affordable Rental Housing: The Basics (2024)

If you live in a pricey market or struggle to make your monthly rent payment, you may be wondering what types of affordable housing options are available. Subsidized housing, vouchers, income-restricted apartments – what do these terms really mean, and how accessible is lower-cost housing?

While the dollar amount assigned to “affordable housing” varies by region, the U.S. Department of Housing and Urban Development (HUD) defines a rental or mortgage payment as affordable if it accounts for no more than 30 percent of a household’s income. If a household is paying a higher share of its income on housing, it is considered “cost burdened.” For a given region, HUD uses the area median income (AMI) to determine what income levels qualify for affordable housing programs.

Here’s a look at the different types of affordable housing programs and an overview of how to qualify.

Public housing

  • Who’s your landlord? A local public housing agency.
  • How do you apply? Through the public housing agency.
  • Where can you live? In the specific housing unit you apply for.

These publicly owned and managed properties offer rents well below market rate, enabling renters to pay only 30 percent of their income on rent and utilities, even when their incomes are very low. Public housing has gone in and out of favor over the years, as buildings were not always well-maintained or safe – Hollywood depictions of “the projects” as hotbeds of crime and despair mirrored the reality of life in some public housing high-rises.

In the past few decades, many older buildings have been demolished, and while the overall number of available units has declined, several cities have taken new approaches to public housing, investing in lower-density units spread across neighborhoods or focusing new development on mixed-income buildings.

Housing choice vouchers

  • Who’s your landlord? An individual homeowner or property manager.
  • How do you apply? Through your local public housing agency.
  • Where can you live? In any property you qualify for that accepts vouchers.

Also known as Section 8, this federal program provides housing assistance to very low-income families and elderly or disabled individuals. Eligible households can choose any rental that meets the requirements of the program, but the owner of the property can decide whether to accept the vouchers, and many landlords and property managers choose not to. Still, vouchers are a valuable option for low-income renters, and they subsidize the cost of rent to ensure families are not paying more than 30 percent of their income on rent.

Once a voucher holder finds a unit and agrees on lease terms, the local public housing agency (PHA) granting the voucher needs to inspect and approve the property to make sure it is safe and the rent is reasonable. Once the rental is approved, the PHA pays a portion of the monthly rent directly to the landlord.

Income-restricted multifamily housing

  • Who’s your landlord? The building owner or property manager.
  • How do you apply? Through the property manager’s standard application process.
  • Where can you live? In the specific unit you apply for.

Developers and multifamily management companies can receive tax credits for designating a portion of their units as affordable rentals. Rent is usually tied to the area median income; a renter earning 80 percent of the AMI (low income) would pay more than a renter earning 50 percent of the AMI (very low income).

Renters who meet the preset income requirements apply directly through the apartment leasing office or property manager.

Community Pillar housing

While the Community Pillar program doesn’t offer reduced or subsidized rents, it provides a path for people who can afford to pay rent but might have trouble securing a rental for other reasons.

Community Pillar landlords are willing to consider applicants who don’t meet their standard rental criteria — for example, renters with poor or no credit, a low income-to-rent ratio or a period of unemployment. Rental shoppers can search for housing on Zillow using the “Income restricted & Community Pillar” filter on any rental search page (under the “More” menu).

Applying for housing assistance

Renters interested in public housing and housing choice vouchers apply through the local public housing agencies that manage these programs on behalf of HUD. You can search for your local PHA on the HUD website.

But here’s the rub: The number of qualified applicants far exceeds the number of available units or vouchers. As a result, most programs have long waiting lists – sometimes numbering in years – when the waiting lists are open. A state or municipality might open their waiting list for just a few weeks or months each year; if you’re able to get on the list, don’t expect assistance anytime soon, particularly if your household earns closer to the maximum eligible AMI. Many programs give preference to applicants earning the lowest incomes.

Section 8 waiting lists tend to be the longest. Public housing units open up a little more quickly, but those with multiple bedrooms are harder to come by. If you’re looking for a studio or 1-bedroom unit, you may find a rental sooner.

For those who meet the income requirements, income-restricted apartment buildings can be a good choice. Still, these units are in high demand, and they may not be an option for renters living outside metropolitan areas where subsidized multifamily properties are less common.

Affordable housing can be a challenge for many people, and while rental assistance programs are available, the wait times can effectively put them out of reach. If you believe you qualify, however, visit your local PHA to apply, and ask if there are additional programs in your area that can provide more immediate housing assistance.

Resources

Affordable Rental Housing: The Basics (2024)

FAQs

Is affordable housing a problem in the US? ›

Nationally, there is a shortage of more than 7 million affordable homes for our nation's 10.8 million plus extremely low-income families.

Who are most affected by affordable housing? ›

Low-Income Households Are Particularly Affected by Unaffordable Housing. Households with the lowest incomes are by far the most likely to have housing costs that are unaffordable.

Who qualifies for affordable housing in us? ›

HUD sets the lower income limits at 80% and very low-income limits at 50% of the median income for the county or metropolitan area in which you choose to live. Income limits vary from area to area so you may be eligible at one HA but not at another.

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