Don't use the S****** word
Why won't the SJ Merc acknowledge that subsidies pay for "affordable" housing?
In an oddly blinkered story on the surge in available affordable housing in the South Bay, the Merc refuses to concede the economics of low-income housing. Specifically, the Merc ignores how taxpayer subsidies (the word never appears in the Merc story) are necessary at every level of so-called affordable development. Housing Solutions Lab, an affordable housing advocacy group, daylights what the Merc obscures.
The rents that low- and moderate-income households can afford to pay are often too low to cover the full costs of owning and managing a rental property.
To fill the gap, developers usually need help in the form of a subsidy. The subsidy most often comes from local, state, or the federal government, but it can also come from other sources.
The subsidy can be used to help cover construction costs, rents, or operating costs.
Assistance with construction costs reduces the amount the developer needs to borrow, and therefore reduces monthly financing costs.
Rental assistance helps tenants pay the rents needed to cover costs.
And operating subsidies reduce the rental income needed to keep the property financially afloat.
Depending on the specifics of a project, it may need one, two, or all three of these kinds of assistance.
--Housing Solutions Lab
{For more on the specific types of governmental subsidies and assistance required for "affordable" housing, check out more from Housing Solutions Lab.}
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