When people talk about affordability, they often use a narrow definition which only considers current housing affordability for very low income households, but there are good reasons to use a broader definition that considers middle- as well as low-income households, transportation as well as housing costs, and future as well as current cost burdens (see table below).
Narrow Versus Broad Affordability Analysis
|Target populations||Homeless and low-income households that spend more than 30% of their budgets on housing||Low- and moderate-income households that spend more than 45% of their budgets on housing and transportation|
|Time perspective||Current||Current and future|
|Costs considered||Rents or mortgages||Rents or mortgages, heating/cooling, maintenance, property taxes and basic transportation|
|Solutions||Preserve and subsidize cheap housing for low-income households||Build lots of moderate-priced housing units in walkable urban neighborhoods.|
A narrow definition favors policies that preserve and subsidize cheap housing. A broader definition tends to supports policy reforms allow much more development of moderate-priced housing ($200,000-600,000 per unit) in walkable urban neighborhoods. Even if the new units are initially too pricey for lower-income households, they increase affordability through filtering, as some lower-priced housing occupants move up to the moderate-priced units, and over time as they depreciate and become cheaper.
The broader definition expands the political appeal of pro-affordability policies. Preserving and subsidizing cheap housing only directly benefits the lower-income households that are lucky enough to receive those units, and some strategies, such as inclusionary zoning, which requires developers to sell some units below market prices, can harm middle-income households by driving up housing prices. However, policies that allow more affordable infill development and improve non-auto transport options directly benefit both low- and middle-income households, as well as improving public health, reducing pollution and supporting local economic development.
A broader affordability definition offers something for everybody, and so expands the scope of potential political supporters. In this case, broad is better than narrow.