WHAT IS housing Affordability?
Housing affordability means that people spend an appropriate amount of their income to pay for housing costs like mortgage, rent, and utilities. Ideally, no more than 30 percent of a person's income should go toward housing costs.*
Utah firefighters make an average of $49,700 per year. With that income, they could afford to pay $1,242 per month toward housing.
Utah veterinarians have an average annual salary of $107,000. They can afford monthly housing costs of $2,675.
Utah restaurant servers typically earn $18,100 annually. Therefore, they can pay $453 per month for housing.
Utah electricians' salaries average $55,400 per year. They can pay approximately $1,385 monthly for housing.
Utah K-12 teachers make about $50,300 yearly. So, they can afford monthly housing costs of $1,258.
Utah registered nurses earn about $76,230 annually. They can afford to pay $1,906 each month for housing.
*Where does the 30% idea come from? When households spend more than 30% of their income on housing, they are considered housing cost-burdened.
In essence, it is a quality-of-life consideration. Cost-burdened households start to face decisions about which needs they can afford to meet. They may forgo paying for other needs in order to cover housing costs to prevent eviction or foreclosure. For example, they may face difficulty paying for groceries when rent is due, or they may have trouble paying for transportation to work or school.
Photo credit, all of the above: Bing Creative Commons
As you see from the examples above, housing affordability is relative. It changes based on income, but also factors such as household size and the costs of other necessary items. Households who pay more for transportation, education, or food have less money available to pay for housing, and vice-versa.
Why affordability Matters
Did you know? Housing affordability benefits the entire community, not just those living in housing that they can afford. Check out some of the benefits of housing affordability:
- Economic investment in the community: When households have room in their budgets, they have greater purchasing power and contribute to the local economy.
- Improved housing stability: Households living in quality housing that they can afford are less likely to move. This increased stability is tied to children's success in school, improved physical health, and improved mental health. Household stability also supports neighborhood stability and safety.
- Effect on property values: Research shows that multifamily housing has neutral or positive effects on surrounding property values of single-family homes.
Providing a variety of housing options is critical to housing affordability. Learn about different housing options here.