Subsidized housing is a subsidy aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housing". Forms of subsidies include direct housing subsidies, non-profit housing, public housing, rent supplements/vouchers, and some forms of co-operative and private sector housing. Increasing access to housing usually contributes to lower poverty rates.
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👉 Subsidized housing in the context of Lower income housing
Affordable housing is housing which is deemed affordable to those with a household income at or below the median, as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental (also known as social or subsidized housing), to formal and informal rental, indigenous housing, and ending with affordable home ownership. Demand for affordable housing is generally associated with a decrease in housing affordability, such as rent increases, in addition to increased homelessness.
Housing choice is a response to a complex set of economic, social, and psychological impulses. For example, some households may choose to spend more on housing because they feel they can afford to, while others may not have a choice.
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Subsidized housing in the context of Affordable housing in Canada
In Canada, affordable housing refers to living spaces that are financially accessible to people with a median household income. Canada ranks among the lowest of the most developed countries for housing affordability. Housing affordability is generally measured based on a shelter-cost-to-income ratio (STIR) of 30% by the Canada Mortgage and Housing Corporation (CMHC), the national housing agency of Canada. It encompasses a continuum ranging from market-based options like affordable rental housing and affordable home ownership, to non-market alternatives such as government-subsidized housing (emergency shelters, transitional housing, and public housing).
Subsidized housing in the context of Social housing
Public housing, also known as social housing, is subsidized or affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a combination thereof. The details, terminology, definitions of poverty, and other criteria for allocation may vary within different contexts, but the right to rent such a home is generally rationed through some form of means-testing or through administrative measures of housing needs. One can regard social housing as a potential remedy for housing inequality. Within the OECD, social housing represents an average of 7% of national housing stock (2020), ranging from ~34% in the Netherlands to less than 1% in Colombia.
In the United States and Canada, public housing developments are classified as housing projects that are owned by a housing authority or a low-income (project-based voucher) property. PBV are a component of a public housing agency. PBVs, administered by state and local housing agencies, are distinct from Section 8 Project-Based Rental Assistance (PBRA), a program through which property owners' contract directly with the Department of Housing and Urban Development (HUD) to rent units to families with low incomes.
Subsidized housing in the context of Subsidized housing in the United States
In the United States, subsidized housing is administered by federal, state and local agencies to provide subsidized rental assistance for low-income households. Public housing is priced much below the market rate, allowing people to live in more convenient locations rather than move away from the city in search of lower rents. In most federally-funded rental assistance programs, the tenants' monthly rent is set at 30% of their household income. Now increasingly provided in a variety of settings and formats, originally public housing in the U.S. consisted primarily of one or more concentrated blocks of low-rise and/or high-rise apartment buildings. These complexes are operated by state and local housing authorities which are authorized and funded by the United States Department of Housing and Urban Development (HUD). In 2020, there were one million public housing units. In 2022, about 5.2 million American households received some form of federal rental assistance.
Subsidized apartment buildings, often referred to as housing projects (or simply "the projects"), have a complicated and often notorious history in the United States. While the first decades of projects were built with higher construction standards and a broader range of incomes and same applicants, over time, public housing increasingly became the housing of last resort in many cities. Several reasons have been cited for this negative trend including the failure of Congress to provide sufficient funding, a lowering of standards for occupancy, and mismanagement at the local level. In the United States, the federal government provides funding for public housing from two different sources: the Capital Fund and the Operating Fund. According to the HUD, the Capital Fund subsidizes housing authorities to renovate and refurbish public housing developments; meanwhile, the Operating Fund provides funds to housing authorities in order to assist in maintenance and operating costs of public housing. Furthermore, housing projects have also been seen to greatly increase concentrated poverty in a community, leading to several negative externalities. Crime, drug usage, and educational under-performance are all widely associated with housing projects, particularly in urban areas.