Affordable housing is a term used to describe dwelling units whose total housing costs are deemed “affordable” to a group of people within a specified income range. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the concept is applicable to both renters and purchasers in all income ranges.
A commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income. Housing costs considered in this guideline generally include taxes and insurance for owners, and usually include utility costs. When the monthly carrying costs of a home exceed 30-35% of household income, then the housing is considered unaffordable for that household.
You live in affordable housing if you pay no more than 30 percent of your gross household income on rent or mortgage payments. This percentage meets the federal guideline for “affordability .” Some states include the cost of utilities in that 30 percent calculation; RI does not.
Affordable Housing is directly connected to economic development. A city’s workforce requires housing that is affordable. Historically, Smith Hill has been a blue collar neighborhood, supplying much of the workforce for Providence’s industries. Today, Providence’s changing workforce still draws heavily from the Smith Hill neighborhood and there is a great need for decent apartments and affordable homes for first-time buyers.