How Affordable Housing Is Different
Contrary to what some think, affordable housing is the same as housing at market price. In fact, newly constructed apartments and condominiums are now required to provide a certain number of designated affordable units. The developer has the option to opt out or instead pay the City of Austin a fee that goes towards the affordable housing fund, but many do not exercise this option. Consequently many apartment buildings have affordable units that are identical to the market priced units!
When it comes to buying a property through affordable housing, however, there are some differences in the benefits of affordable homeownership and conventional homeownership. Here are a few:
- Affordable properties are capped at 2% nominal appreciation, so the value of your home likely won't grow as quickly. This is in place so that the housing remains affordable for years to come, which brings up the point that once an affordable housing property is designated it will always remain that way as long as the current laws remain. One benefit of the capped appreciation is that your property taxes also can't increase more than 2% per year.
- The property has to serve as your primary residence. If you have to move then you cannot rent out the property, although you can rent out individual rooms to roommates if you live there as well.
- If you buy an affordable property and your income then increases beyond the threshold, you can still remain in the property for as long as you like. However, you can only stay there if the property continues to serve as your primary residence and once you sell the property you will no longer qualify for the program unless your income decreases to below the 80% MFI threshold
In conclusion, there are some contingencies but the housing itself is no different than conventional housing and is an excellent option if you qualify for it. It's all about integration, bringing the community together, and making sure that every child in Austin has the opportunity to succeed.
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