Agenda - Planning Commission - 09/04/2014

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Last revised July 24, 2014 Appendix B: Glossary of Affordable Housing Programs and Funding Sources Accessibility Refers to the design, construction, or modification of housing to enable independent living for persons with disabilities. Under the 1988 Amendments to the Fair Housing Act, seven key construction requirements must be met for a building to be accessible: accessible building entrance on an accessible route; accessible common and public use areas; doors usable by a person in a wheelchair; accessible route into and through the dwelling unit; light switches, electrical outlets, thermostats and other environmental controls in accessible locations; reinforced walls in bathrooms for later installation of grab bars; and usable kitchens and bathrooms. Accessible Unit: A dwelling unit that has physical features, such as grab bars or an entrance ramp, that help tenants with mobility impairments gain full use and enjoyment of their apartment. Accessory Dwelling Units (also known as accessory apartments, guest apartments, in-law apartments, family apartments or secondary units) Dwelling units that provide supplementary housing and can be integrated into existing single family neighborhoods, to provide a typically lower -priced housing alternative, with little or no negative impact on the character of the neighborhood. Because the units are usually small, they are more affordable than full-size rentals. There are three types of accessory units: • Interior - using an interior part of a dwelling; • Interior with modifications where the outside of the dwelling is modified to accommodate a separate unit (this could include a unit over the garage if the garage is attached) • Detached - a structure on a residential lot that is separate from the main dwelling, yet by definition still "accessory" and so smaller than the main unit (this would include a unit over the garage if the garage is detached). Affordable Housing There is no universal, legal definition of affordable housing What is considered "affordable" by a family earning $100,000 a year will likely be out of reach for another family that earns only $25,000 a year. Incomes and housing costs also vary by location. Within the context of programs aiming to provide affordable housing, however, area median income is a typical starting point for determining what is considered affordable housing. For example, in recent years the Council has used 60% of the metro area median income in calculating and communicating local fair share of affordable housing need (Need), and has counted activity by local governments serving households at or below 60% of area median income as "affordable" activities. However, this is only part of the equation. The other is the use of two rules of thumb that contemplate not just the income that a households earns, but the percentage of their income they can or should expect to pay for housing. The first rule of thumb is common in multifamily housing, where the federal government considers housing to be affordable if an income qualifying family spends no more than 30% of its income on its housing costs, including utilities. Using this benchmark, a family earning $30,000 a year could afford to pay up to $9,000 a year (or $750 a month) on housing. In the single family market, lenders underwriting home purchases typically require that families spend no more than some set percentage of income (such as 28%) for mortgage payments, taxes and insurance. It is the combination of these elements that determines whether housing is affordable under federal or state programs, where affordable housing exists when a household that 1) is earning an income low enough to meet the targeted income limits under a housing program (that is, at or below 60% of area median as used under the tax credit program), 2) pays no more than 30% of its gross income on housing. For the purposes of this plan, the Metropolitan Council 2040 HOUSING POLICY PLAN 1 METROPOLITAN COUNCIL DRAFT RELEASED FOR PUBLIC COMMENT Appendices 1 Page 79