INTRODUCTION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Defining Affordability
Housing "affordability" can be defined in different ways based on both household income and housing types. Affordability in Relation to Income Affordable Housing: Under a standard determined by the U.S. Department of Housing and Urban Development (HUD), housing is affordable when housing costs are less than 30% of a household’s gross income. HUD uses the Area Median Income (AMI) for a family of four as the primary metric to determine affordability in various regions of the country. In the case of Wake Forest, HUD uses the Raleigh Metropolitan Statistical Area’s AMI, which was $95,700 as of 2021. Alternatively, the US Census’ Median Household Income can be used as a metric for determining affordability on a more local level. The Median Household Income in Wake Forest is $92,210 per the 2019 American Community Survey (ACS) 5-year estimates.
Key Affordability Terms Defined: Cost Burden: A household that spends 30% or more of their gross income on housing costs is considered cost burdened. Severe Cost Burden: A household that spends 50% or more of their gross income on housing costs is considered severely cost burdened. Low- and very low- income households are particularly impacted. Residual Income: A household’s residual income is the money left for necessary expenses such as food, childcare, health care, and transportation after subtracting housing costs. Based on the Economic Policy Institute’s Family Budget Calculator, Wake Forest households that make less than 70% of the Area Median Income will struggle to afford the cost of living due to the costs of food, childcare, health care, and other necessities.
Affordability in Relation to Housing Types Some housing is affordable because it receives public subsidy, while other housing is affordable because of the type, location, or age of the housing. All housing types play an important role in meeting the diverse range of housing needs and preferences of the Wake Forest community.
Naturally Occurring Affordable Housing (NOAH): Market-rate housing (for rent or purchase) that is priced at levels that are affordable to low- or moderate-income residents. Subsidized Housing: Affordable rental and ownership housing developed and/or operated by nonprofit and for-profit developers using public subsidies. Subsidy can be both at the building level (project-based) or the tenant level. Tenant Based Vouchers: Families receive a voucher to be used to pay for a portion of rent at an apartment. North Carolina law does not require all landlords to accept this form of rental subsidy.
Public Housing: Housing managed by public housing agencies with operating and capital funds provided by HUD.
Permanent Supportive Housing: A model that combines housing, health care, and supportive services to help individuals and families lead more stable lives.
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