Affordable Housing Brief

July 17, 2006

This brief provides background information about affordable housing. There are multiple ways to measure the affordable housing problem; the most common is to estimate the percentage of households that pay more than 30 (or 50) percent of their income in rent. In 2000, 45 percent of Boulder households that were renting housing paid more than 30 percent of their income in rent, and in 2004, 100 percent of Boulder households making less than $20,000 paid more than 30 percent of their income in rent. Affordable housing has been historically, and remains, a serious problem among the poorest income groups; more recently, rents have been rising because of better housing quality and possibly increased government regulation.
A review of the literature finds that:

• Homeownership may provide slight social benefits compared to renting

• The effects of affordable housing on surrounding neighborhoods can be positive or negative

• Moving from affordable housing in a high poverty neighborhood to a lower poverty neighborhood does not appear to impact adults, although it appears to have positive impacts for female children and some negative impacts for male children

• The literature is unclear about whether housing vouchers or constructing new housing is a more effective method of reducing housing problems

• New affordable mortgage finance programs do not significantly overcome financial barriers to homeownership for most poor renters; other programs involving “shared” ownership may be more successful

• Credit counseling may be effective in preventing borrower delinquency

An overview is provided of federal, Colorado, and Boulder programs designed to make housing more affordable. Finally, state and local projects of interest and potential partners are listed.