What are Low Income Apartments?

Anyone finding themselves in need of low income apartments may first want to understand how low income housing is defined.  Affordable housing is generally considered to be a dwelling whose total cost—either rented or purchased is considered reasonable to those with a median household income.  The statistical term “median” refers to a point precisely mid range between the lowest and highest levels of the item being compared.  In income this would be the dollar amount (generally within a previously defined geographic area) exactly at the midpoint between the lowest incomes and the highest.

Guidelines for “affordable housing” vary, but the commonly accepted guideline in the U.S. is a cost which does not exceed 30% of a particular household’s gross (before taxes) income on a monthly basis.  Carrying costs which exceed 35% of household income classifies a dwelling as unaffordable for the household.

In recent decades the cost of housing has risen so dramatically that this rule of thumb has become increasingly under fire as unrealistic.  The world real estate market since the year 2000 has experienced a housing pricing “boom” cycle which has put the affordability of both purchased and rental units out of the reach of lower to mid income families. Income—which is the driving factor in housing affordability—has not kept pace with inflated real estate prices, which further complicates the equation.

The recent economic downturn has resulted in a flattening of real property values which are then reflected in lowered sales prices, but unfortunately at the same time, the recent financial crisis has also severely impacted income levels which have dropped as the free market adjusts based on the laws of supply and demand. With larger numbers of employees seeking work, employers have increasingly driven down the real wages of new hires.

There are severe social and economic costs to a lack of affordable housing which impact the overall health of a community as defined by urban planners.  Lack of affordable apartment rentals in a geographic location have the end result of driving potential renters farther away from economic centers where the best employment opportunities are, to outlying lower cost areas.  This results in longer commutes which effectively erase any financial benefits to reduced housing costs, especially as the price of gasoline continues to escalate.  Increasing congestion on roadways and highway systems, lack of low cost labor, and even declines in school enrollment have all be directly linked to a lack of affordable housing in most U.S. cities.

So what exactly are low income apartments?  For a family of four making less than 80% of the median income for their area (the federal definition of a low income family unit), with an income of 25,000, rental and associated costs should come to no more than approximately $625 dollars a month.  In many areas of the United States today, that amount of rent will not pay for a one bedroom apartment, let alone a living space comfortably able to accommodate a family of four.

A lack of affordable housing will continue to be not only a reality of modern living but a controversial and contentious issue with great social implications as the world moves forward into the future.