letter blocks sitting on a table that spell out the word "attainable" with question mark graphics above it

The definition of “attainable housing” has not always been clear. The fact that you have searched for and are now reading this article is a testament to this.

Often conflated with “affordable housing,” the definitions of these terms can confuse those not involved in community planning matters, which often gets in the way of people fully participating in the planning process.

Town planners use their fair share of jargon, which helps them communicate with each other more efficiently, but it also confuses those who are new to the topic.

This article will examine the definition of attainable housing and explain the critical differences between “attainable,” “affordable,” and other categories of housing available today.

Today, let’s shed some light on the most common terms related to home prices. By the end of this article, you will have a good understanding of the main categories of homes regarding cost and understand the differences between them.

What Is Attainable Housing?

Attainable housing is housing that is affordable to people earning around the Area Median Income (AMI). Households living in attainable housing and earning between 80% and 120% of the AMI should not need to spend more than 30% of their income on housing costs.

There is a lack of attainable housing in many communities across the US today, with more and more people being priced out of their local market.

Unaffordability is not a new problem—it’s been gradually getting worse over the last few years. The issue is not restricted to people on low incomes either but is something that affects even those with good, well-paying jobs.

To understand what attainable housing is, we should give it some context. There are several housing categories regarding affordability, and knowing what these are will help make things clear.

Here are some definitions.

Market Value Housing

The market value of housing is the price people are willing to pay to buy or rent a home in a specific area. It is the price dictated by the market and is influenced by supply and demand.

The more demand there is for housing in an area, the higher prices will be, and if supply is low (not enough houses being built), this will also push up prices.

Attainable Housing

The market still dictates attainable home prices, but the options available allow buyers from a broader range of economic backgrounds to afford them.

Attainable housing is housing that is affordable to those earning the Area Median Income, meaning they need to spend no more than 30% of their income on their home.

The types of houses included in the category of attainable housing may consist of single-family dwellings, condos, and apartments.

The front doors and steps of a duplex, a type of attainable home
A duplex is considered a form of attainable housing.

The government sometimes intervenes to increase the stock of attainable housing in a particular community. These measures could be in the form of incentives or even bylaws to encourage such housing.

Affordable Housing

Affordable housing is priced below the market value and typically requires no more than 30% of a household’s monthly income to buy.

Subsidies are provided, generally by the government, to lower the cost that occupants need to pay for affordable housing.

Some areas have waiting lists for affordable rental units, which are an option for people who can’t afford the market rent.

Subsidized or Rent-Geared-to-Income (RGI) Housing

Rent-geared-to-income houses have their rent set according to the monthly income of the occupants.

The rent to be paid usually won’t exceed 30% of the household’s monthly income. If the home generates more income, it pays more rent.

This option provides a variety of housing types, including townhomes, single-family dwellings, and apartments. It can help people who meet the income eligibility requirements, such as those on unemployment compensation or disability income.

Two rent-geared-to-income highrise apartments side-by-side

What Is the Difference Between Affordable and Attainable Housing?

People are often confused by the difference between attainable housing and affordable housing. Attainable housing can be afforded by people earning around the Area Median Income (AMI). Affordable housing is subsidized to allow people earning much less than the AMI to buy or rent a home.

So, attainable housing is still “market rate” housing, whereas affordable housing is subsidized to make it affordable.

The subsidies for affordable housing usually come from the government, but how is the cost of attainable housing reduced to an achievable level without direct assistance?

Let’s look at that in more detail.

How Can Attainable Housing Be Delivered?

Attainable housing availability can be improved through several different means, such as the following:

  • Encourage the building of higher density housing, e.g., by amending the regulations
  • Using off-site built homes to reduce the cost of construction
  • Using high-efficiency green technologies to lower the cost of ownership by minimizing utility bills

Let’s look at a case study in the City of Englewood, Colorado, where a lack of attainable housing has been highlighted by the local community, and steps are being taken to address this.

Why Do We Need Attainable Housing?

Many people recognize the housing problems communities across the US face right now, with many people being priced out of the market.

This is a particular problem in popular areas of the country, such as the San Francisco Bay Area, where houses are changing hands for 15-20% above the asking price.

A row of San Francisco Bay Area homes in front with the city skyline at sunset in the background

The Bay Area is a somewhat extreme example, driven partly by the influx of tech workers who have moved to the area to take up high-paying jobs with the big tech companies that are based there. Still, it serves as an excellent illustration of the broader problem affecting communities across the US.

These new people have more money to spend and drive up the price of housing in the area. The result is that essential workers, such as bus drivers and teachers, cannot afford to buy or rent homes in the communities where they work.

This is obviously a severe problem for everyone, not just the people who have been priced out of the housing market.

School teachers might have a longer commute or have to put up with inadequate housing, and the rest of the community will be affected by shortages of those critical workers who provide essential services.

Since 2020, according to real estate brokerage Redfin, house prices across the US have increased from around $300k to almost $400k, with the typical buyer’s monthly mortgage payments shooting up 30% compared to the same time last year.

The rising costs of ownership are also pushing up rents, and the result is that homeownership is less attainable for people across the US today.

Why Is Home Ownership Becoming Less Attainable?

Several driving factors are making homeownership less attainable. They include:

  • Supply is outstripping demand
  • The cost of borrowing is at a historical low
  • The cost of land is rising
  • Zoning regulations are causing fewer attainable homes to be built

Let’s look at these factors in more detail.

Increased Demand for Housing

According to the US Census Bureau, the age group known as Millennials is the most prominent living generation of people in history (even greater in numbers than the Baby Boomers). They are reaching an age when they are looking for homes to buy.

We have an article about millennial homeownership here that you might find interesting.

This development is enough on its own to significantly increase demand for housing but added to the historically low cost of borrowing now, this is making for colossal demand in the housing market.

Lack of Housing Supply

The supply of housing is not matching the increased demand that people are now seeing across the country.

In fact, according to the US Census Bureau, from 2010 to 2019, fewer homes were built than in any decade since the 1960s.

The lack of new homes for entry-level buyers is particularly acute, with the proportion of homes suitable for new buyers making up less than 10% of the total, compared with 40% in the 1980s.

A graphic of stacks of coins in or order of ascending heights with model homes stacked on top, indicating rising housing prices

The result is that the housing shortage is getting worse, with the shortfall growing by more than 50% between 2018 and 2020.

Shortage of Attainable Housing

The shortage of attainable housing is worst in desirable areas, such as where the schools are good, there are many good jobs, and transport links are good.

One of the factors causing this shortage is the regulations related to planning and the creation of zones for different housing types.

Housing Zones and Regulations

Housing zones are specified in local regulations and stipulate what types of houses can be built where.

Sounds sensible, right?

The problem is that many of these zones require builders to construct only single-family dwellings within them. This type of development is very low density, and the cost of building at such low densities is high. 

Single-family dwelling zones account for 82% of land in the San Francisco Bay Area and are a significant contributing factor to the rising cost of homes there.

High-density housing is not permitted in large parts of the country; even duplexes are outlawed in many places. But that’s not the only regulation preventing higher-density housing from being built.

Other rules actually make high-density housing illegal to build, such as a minimum number of parking spaces required for each house and minimum lot sizes, which are often very large.

As a rule of thumb, the lower the housing density, the more expensive it is to build.

Developers across the country are being driven to focus on bigger, luxury houses instead of multi-family housing or starter homes. The high demand and low supply of housing increase the cost of housing for everyone.

Front view of a row of luxury condominiums

Changes to zoning laws are often voted against by current residents because they don’t want the character of their neighborhoods to change.

We need a re-think if more attainable housing is to be created.

What Does Attainable Housing Mean for a Town?

We covered the definition of attainable housing above, but let’s look at what having sufficient attainable housing in a town means for that community.

To be a good place to live, a town must have sufficient accommodation for everyone who wants to live there. But, more than that, it must be able to attract and keep key workers who are essential to that town’s success.

This stipulation means that there must be suitable housing for all demographic groups, from working-age single adults through young families to older people on fixed retirement pensions.

Any town must accommodate workers to support all of these demographics and more. The schools need teachers, the hospitals need doctors and nurses, there need to be people running the fire and rescue services, law enforcement, etc.

If these crucial people cannot afford to live in a town, that creates difficulties and shortages, making the place less successful and less desirable to live in.

It is extremely important for the health, well-being, and quality of life of everyone in the community that suitable housing is available for everyone. Attainable housing is a crucial component of this.

City of Englewood Attainable Housing Example

The City of Englewood is a home rule municipality in Arapahoe County, Colorado. Many Englewood residents have expressed concern that there are not sufficient attainable homes.

Street view of a road in downtown Englewood, Colorado with decorative lights, multi-story buildings and oncoming traffic
Courtesy of Iron Works Village

The Problem With a Lack of Attainable Housing

The average price of a home in Englewood is around $380k, according to the 2020 US Census. 

The average household income in Englewood is $56k, which means the average household can afford a home valued at around $250-$260k.

It’s clear then that there is a discrepancy of $120k or more between what people can afford and what a house costs.

Increasing the Stock of Attainable Housing

The lack of attainable housing in Englewood is being tackled in several ways.

Decreasing the Cost of Land for Housing

By changing the zoning rules and incentivizing the building of duplexes and triplexes instead of single-family homes, Englewood hopes to bring down the cost of land for housing.

Allowing more homeowners to share a lot in this way reduces the overall cost for each household.

Reducing the minimum lot size is also an option, which means less land is required for each house, thereby reducing the overall cost per house.

Changing the Regulations to Promote Attainable Housing

The definition of a household could be redefined to be more encompassing. Previously, a household was defined as two unrelated persons and their families living within a single structure.

This could be changed to four unrelated persons living in a house, which would allow more people to share a house and share costs.

Encouraging Multiple Structures to Be Built on a Single Lot

Another option is to build denser houses in a townhome style, which would allow multiple structures on a single lot. Under this option, the homeowner owns the structure but not the land on which it sits.

Promoting the Building of Accessory Dwelling Units

Accessory dwelling units are additional dwellings that can help to offset the homeowner’s costs and could also be permitted in Englewood.

a wood frame accessory dwelling unit sitting on a concrete foundation in the backyard

They can make good investments and generate rental income for the owner. Please read our various articles on the subject for more information about this.

As the community in Englewood moves forward with these changes, they hope that the availability of attainable housing will increase, providing more homes for the “missing middle” and key workers essential to the area.

Summary

Attainable housing is housing that is affordable to households earning around the Area Median Income (AMI).

Such households should not need to spend more than 30% of their income on housing for it to be considered “attainable.”

Affordable housing, on the other hand, is subsidized housing. Typically, the subsidies come from the government and are designed to make homes affordable to those on much lower incomes.

Attainable homes are critical to a community because essential workers such as bus drivers, teachers, and law enforcement officers cannot afford to live in the community without them.

The availability of attainable housing has been falling in recent years, partly due to an increase in demand for housing and partly due to local regulations that make it difficult for homes to be built more cheaply.

The supply of attainable housing could be increased by changing the planning regulations, such as allowing houses to be built more densely, which would bring down the cost per house.

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