Common Affordable Housing Definitions

Housing is a very complex issue, leading to much confusion over terminology. 

Affordable Housing

Affordable Housing: According to the federal government, housing is “affordable” if it costs no more than 30% of one’s monthly household income for rent and utilities.  There are two more terms that typically appear alongside “affordable”: very low and low. This refers to the percentage of the median county income that a family makes. For example, in SD County, the median income is $97,300 for a family of four. So a family of four making between $48,650 and $97,300 is part of the “low income” category, and a family of four making $48k,650 or less is in the “very low income” category. Developers who build units in these categories must verify incomes and submit the verification to the city.

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Low Income Housing

Low Income Housing: Housing for residents making 50 to 80 percent of area median income (AMI) — $32,000 to $72,000 annual salaries. People in this income category include:

  • Primary school teachers and school support staff
  • Lifeguards and EMTs
  • Hospital employees
  • Social Workers
  • Seniors on a fixed income
  • Entry level positions for recent college graduates
  • Janitors, gardeners, housekeepers
  • Restaurant workers
  • City support staff
  • YMCA employees
  • Retail sales clerks
  • Medical Assistants and Home Health Aides
  • Food delivery drivers
  • Office support staff
  • Artists and Musicians

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100% Affordable Housing Community

A 100% affordable housing community generally is one that is built for people with low incomes, primarily by non-profit developers, usually requiring public subsidies. These developers should be experts in managing and providing services for the populations served. La Costa Paloma is an example of an award-winning community of this type in Carlsbad.

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Housing Element

The Housing Element is one of several “elements,” or focus areas, included in the City’s General Plan, which serves as the City’s blueprint for its growth and development. Every eight years, the State of California requires cities to update their Housing Elements to address future housing needs. California’s housing element law acknowledges that, in order for the private market to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulatory systems that provide opportunities for (and do not unduly constrain), housing development. As a result, housing policy in California rests largely upon local housing elements. See Housing Update for Encinitas, 2021-2029.  

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Inclusionary Rate

Inclusionary Rate (IR):  The City of Encinitas Housing Program requires new residential projects of seven units or more to provide either 20% of the dwelling units as affordable to “low-income households” or 15% of the dwellings units as affordable to “very low-income households.” The City offers alternative compliance options such as “in lieu fee” (i.e. paying a sum of money instead of providing the required units) and off-site compliance.

The City hired a consulting firm, Keyser Marston Associates, Inc. (KMA) to determine whether recommended inclusionary rates amounted to a “taking” of private property.  KMA found that a 20% IR for low income and a 15% IR for very low income housing were the maximum threshold percentages that would not be considered a “taking” of private property.  During the City Council’s June 23rd, 2021 meeting where the Inclusionary Rate was discussed, City Council members discussed the risk of further lawsuits filed against the City of Encinitas by The State of California Department of Housing and Community Development (HCD), and local developers,  if  the City fails to follow KMA-recommended IRs.  In addition to potential lawsuits, the City risks losing control of land-use zoning.

See Housing Update for Encinitas, 2021-2029.  

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Deed Restricted

Deed Restricted Units:  These are rental units and owned homes that have rents or resale rates below market levels, made possible through government subsidies, philanthropic efforts, inclusionary zoning, or other incentives. As part of the agreements made between developers and cities, those units designated for low/very low-income tenants often are deed restricted, which means that they must remain available to persons/families with those income levels either in perpetuity (i.e. forever) or for a fixed period that is often at or around 55 years.

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Density Bonus

Density Bonus:  An incentive for developers to encourage more affordable / senior housing. This may include the following:

  • Increases in project density (i.e. the number of units that are allowed at a specific development site per applicable zoning laws), up to 41% above what would normally be allowable.
  • Up to an 80% increase in density for 100% affordable projects
  • Reduced parking requirements
  • Reduced setback and minimum square footage requirements (the developer may be allowed to build in less open space to their project, and less space between buildings and the street, than would otherwise occur)

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