Everyone needs a place to live. For those of us who develop housing, it can be difficult to distinguish between the many different terms used for housing types. Lately, attainable housing has emerged as a term used to describe housing affordable for households in the moderate-income ranges, which means households between 80-120% of area median income (AMI). This can be confusing because affordable housing has been used to describe both generally affordable housing and housing with subsidies attached to it for lower-income households. The attainable housing term has come along to help with this confusion.
Affordable housing has now been associated with subsidized housing for lower-income households, and attainable housing is used to describe non-subsidized housing that can be afforded or attained by much of the population. This then begs the question of why this distinction is necessary now.
The shrinking supply of moderate-income housing seems to be a going concern that continues to grow in scale. Why does this continue to happen and what can be done? The ULI Community Development Council did a survey in 2019 that showed all the challenges we have now come to understand; high cost of capital, limited buyer financing, and high cost of materials/labor. In 2019, those issues were not nearly as acute as they are now in 2024. Since 2019 we experienced a pandemic that changed the way people thought about their homes. Most people held onto their current housing and stalled or stopped looking to buy new houses. This reduced housing inventory and sent home prices skyrocketing. So, this issue started long before and the gap continues to widen for moderate-income buyers, especially among first-time homebuyers. Compounded with rising rents and slowing wage increases relative to inflation making it harder to save for a downpayment, and you have a recipe for a delayed entry into the housing market. This might explain the emergence of the term attainable housing, as the issue around entry homes and moderate-income household homes has never been quite so evident and widespread.
Affordable housing is also facing many challenges, but that is nothing new to the world of publicly subsidized housing. The many government layers can quickly overcomplicate a project into non-completion. Beyond that, all the issues stated above for attainable housing are also present and further amplified in the world of subsidized affordable housing.
If we continue to see trends like the ones in the worlds of affordable and attainable housing, while also seeing skyrocketing homelessness, it seems we are headed for a major economic shift in our housing markets. With subsidized affordable housing it will be possible to put more subsidies into projects to make them work. However, attainable housing cannot be fixed that easily. Because it is market-rate housing without government intervention, it requires market solutions. If market solutions aren’t available, it might require further government involvement or a changing of the American lifestyle in a major way. What else can we do to solve this potentially major issue?
See also – possible solutions to our coming housing issues
