James Franko // December 1, 2009
The U.S. Department of Housing and Urban Development (HUD) considers housing affordable if it costs less than 30 percent of a family's income. Yet, according to HUD, 12 million renters and homeowners spend more than 50 percent of their income on housing. Many of these are low-income individuals or families. But in some areas even middle-income families find the supply of affordable housing limited.
For instance, assuming a family spends no more than 28 percent of its gross income on housing [see Figure I]:
- In the San Francisco metropolitan area, only 26.9 percent of houses sold are affordable to a family with an annual median income of $96,800.
- In greater Chicago, more than two-thirds (67.8 percent) of houses are in the price range of a median income family ($74,600).
- In Indianapolis, almost all homes (94.5 percent) are affordable to the typical family ($68,100).
Since rental prices closely track home prices, these numbers also indicate the general availability of affordable housing.
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I might not notice it but sometimes the people are the number one barriers for these housing solutions. Let's sacrifice a little guys. Good luck.
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