What is affordable housing?
Our monthly blogs seek to inform you about the Midtown Redevelopment Authority (MRA)/Center for Civic and Public Policy Improvement (CCPPI) affordable housing program, but what is the definition of “affordable” in this context and who can qualify to buy?
Not traditional affordable housing
Traditionally, affordable housing refers to low-income, subsidized, or public housing. The MRA/CCPPI program is different in that it provides workforce housing.
Workforce is a term used to describe those who are gainfully employed and tend not to be the typical targets of affordable housing programs. Think of police officers, firefighters, teachers, nurses, other medical personnel, and shift workers.
Who can qualify?
The MRA/CCPPI program is available to homebuyers with incomes between 80% and 120% of the Houston Area Median Income (AMI). These income limits are considerably higher than the limits used for the traditional types of affordable housing mentioned above.
How do we keep homes affordable?
Over several years, MRA acquired 450 abandoned lots in Houston’s historic Third Ward. Those lots are now available to for-profit and nonprofit builders who pledge to use the land to construct affordable housing. The price paid by for-profit developers is $1.50 per square foot, an asking price that is far below market value. The program’s nonprofit partners are given tracts of land for free.
The land subsidy reduces overall development costs, allowing developers to put more money into the construction. In exchange for the land subsidy, buyers have to occupy these homes for 20 years.
What do these homes cost?
Homebuyers with income under 100% of the AMI will pay no more than $245,000 for a home with three bedrooms and a two-car garage.
The program’s goal is to preserve affordability in neighborhoods rapidly becoming unaffordable for low- to moderate-income families. The idea is to provide the opportunity for residents to stay or return to the areas where they grew up.
You can read more about the program here.