The term affordable housing refers to all types of housing – whether owned or rented – that is affordable to households of various income levels. Housing is considered affordable when it costs no more than 30% of a household’s gross annual income.
For example, a family making $36,000 per year would spend no more than about $900 a month for it to be considered affordable. Most income-based, affordable housing developments are built for families and individuals who earn 60% or less of the area median income (AMI).
There are many examples in California of affordable housing that are owned and managed by the private sector. These developments are made possible because of specifically designated low-interest loans or other public financing approaches. By contrast, public housing is created and frequently managed by the government.