The ABCs of affordability in Washtenaw County

Housing affordability is a hot topic in the Ann Arbor area, and with good reason. In recent years we've learned that the middle class can't afford to live in Ann Arbor, the Ann Arbor metropolitan area is one of the most segregated in the nation, and Ypsilanti has a growing affordability crisis of its own. Citizen activist groups like Defend Affordable Ypsi (DAY) and Ann Arbor YIMBY (Yes In My Backyard) have arisen in response. However, the issue of affordable housing involves numerous complex terms and poorly defined concepts – starting with "affordable housing" itself.


"The term affordable housing can be a bit ambiguous," says Nathanael Romero, a founding member of DAY. "When I talk about affordability, I'm talking about housing that is affordable to people at all income levels."


This can take many forms in our community.


"A lot of times people are not talking about the same thing when they are talking about affordable housing," says Amber Fellows, an Ypsi-based affordable housing activist and DAY member. "In the most general sense you are supposed to be able to sustain your housing. According to (the U.S. Department of Housing and Urban Development, or HUD) that means your expenses, including utilities, should be 30 percent of your income or less. (This definition of affordability) is not satisfying for a lot of people … there's no 'affordable unit' per se."


In order to better understand affordable housing and what it looks like in our community, let's start at the beginning. Washtenaw County defines affordable housing as "housing for an individual or family that costs less than 30 percent of their gross annual income." We can consider this affordable housing with a small "a" and it is based on the HUD definition of "housing burdened." HUD considers anyone paying 30 percent or more of their gross income for housing to be housing burdened. Anybody paying less than 30 percent is paying an affordable amount for their housing.


What does this look like in Washtenaw County? We can look at the the U.S. Census Bureau's American Community Survey (ACS), which regularly estimates demographic and economic data at the municipal level. The ACS estimates that Ann Arbor's mean annual income was $84,109 in 2016, or a mean gross monthly income of $7,009. This means if your household is making the average income in Ann Arbor and you are paying less than $2,100 per month in total housing costs, you are not housing burdened. The ACS estimates that Ypsi's mean household income was $50,529 in 2016. This means the average household would not be burdened if its residents are paying less than $1,260 per month for their total housing expenses.


When people discuss affordable housing projects, you'll often see terms like 30 percent AMI or 60 percent AMI being tossed around. These are benchmarks for affordability based on the area median income (AMI). The ACS estimates Ann Arbor's AMI was $57,697 between 2012 and 2016. So a development offering units targeting affordability at 30 percent AMI in Ann Arbor would offer rents that would not rent burden someone making $17,309 per year, meaning their monthly rent would be under $430.


How can a building afford to offer rent at such a discounted rate? This is where federal Low Income Housing Tax Credits (LIHTC) come in. The LIHTC program is administered through HUD. LIHTC are given to eligible projects that agree to offer low rents to tenants making a specific percentage of the AMI. In Michigan, LIHTC are given to eligible projects by the Michigan State Housing Development Authority (MSHDA). Locally, the Veridian at County Farm project on Platt Road plans to use LIHTC to offer some units to tenants making 30 percent of the AMI and 60 percent of the AMI for a period of 40 years.


The LIHTC program is one example of subsidized housing. Subsidized housing is, in essence, any housing that uses government money, whether local, state, and/or federal, to offset consumer costs. Often when we hear about subsidized housing we imagine the public housing projects of yesteryear, like Cabrini-Green in Chicago or the Brewster-Douglass Housing Projects in Detroit. But locally government subsidized projects manifest themselves in a number of ways. In addition to the LIHTC program, Section 8 housing vouchers are another major federal housing subsidy at work in our community.


Section 8 housing vouchers get their name from Section 8 of the Housing Act of 1937, which authorizes the federal government to pay rental housing assistance to private landlords on behalf of low-income households. One of the local agencies that administers Section 8 vouchers is the Ann Arbor Housing Commission (AAHC). The AAHC is a "related government entity," like the Ann Arbor Downtown Development Authority, created by an ordinance of the Ann Arbor City Council. The AAHC also administers other federal housing programs including Veterans Affairs Supportive Housing (VASH) and Continuum of Care funds, which go to support homeless veterans and the chronically homeless, respectively.


The AAHC is the largest provider of subsidized housing for low-income households in Ann Arbor and Washtenaw County. Between the properties it owns and manages as well as the voucher programs it administers, the AAHC owns or provides vouchers for about 850 apartments in Ann Arbor and about 1,000 apartments in the rest of Washtenaw County.


Government-subsidized housing, whether federal, state, or municipal, would be what we might refer to as affordable housing with a capital "A," while the broader idea of housing affordability is what we might call small "a" affordable housing. This is where you may hear the terms "market-rate" and "workforce" housing. Market-rate housing is simply non-subsidized housing. Though this may seem like an easy concept, market-rate housing is subject to economic forces at the regional level, which are currently driving up home and rental prices in Washtenaw County.


"There are only so many square feet here that you can come move to," says Bryan Foley, a housing activist who has organized a series of conversations about gentrification in Ypsi. "People can't afford to live in Ann Arbor because of the rent increases. A lot of people are coming to Ypsilanti now to take advantage of cheaper houses, foreclosures, et cetera. So now the cost of rent is going up, (the) cost of living is going up, and (they) are not matching these increases."


Workforce housing can be a bit harder to define.


"I like to think of workforce housing as something that a teacher or a firefighter or a police officer can afford," says Jessica A.S. Letaw, founder of Ann Arbor YIMBY.


Often these workers make less than the AMI, but too much to qualify for housing assistance. The availability of workforce housing results from a complex interaction between housing supply and demand, as well as municipal zoning. Like many aspects of housing affordability, workforce housing is tough to define – but developing an understanding of these concepts is crucial to solving the broader issue of affordability in our community.


"The solutions (to housing affordability) are going to have to be as complex as the challenges," Letaw says. "There are a lot of different ways to support affordable housing. All of them are valid. All of them are necessary. There is no one silver bullet to 'solving' affordable housing. Effective supporters need to take time to understand the complexity of the issues so that they can be strong advocates."

Ben Connor Barrie is an Ypsilanti resident and founder of the blog Damn Arbor.


All photos by Doug Coombe.

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