Why the term affordable housing is a con

Why the term “affordable housing” is a con

by Peter Burke // October 15, 2023  

Every politician, from the prime minister to your local council member, wants to be an affordable housing champion. However, despite their good intentions, they’ve been duped by a system that puts all the power in the hands of developers and investors who have no interest in creating genuinely affordable homes.

Affordability is a number.

Why the term affordable housing is a con

The term “affordable housing” is generally used to describe where the cost is 80 per cent of a market value. However, the definition is problematic because it depends on your other expenses, plus the size and makeup of your household.

And most importantly, the location, 80% of £1m? It isn’t affordable! This is where the system is constantly against you because developers can’t make the numbers work so well in lower-value areas when they have to build and sell for 80% of the market value, so fewer of them choose to. 

“Affordable” doesn’t necessarily mean “cheap.”

Why the term affordable housing is a con

But what does “affordable housing” mean?

  • Affordable doesn’t necessarily mean cheap. So it comes back to your circumstance. Many people will struggle and often must rely on other forms of assistance, such as credits or payments.
  • Affordable housing is not low-income housing. 
  • Cheap isn’t always public or social, either. 

Working people need assistance with affordable housing.

Why the term affordable housing is a con

Tax credits are a form of subsidy designed to help low-income households meet their housing needs. But let’s be clear: tax credits are not helping the poor.

Instead, tax credit programmes are so that only a tiny portion of the total funds allocated for them go toward subsidising affordable housing for low-income families—the rest goes straight into private industry’s pockets as incentives to build.

The system as we know it today arose out of many laws over time, so no one knows exactly where all the pieces come from or how they fit together. This makes any attempt at reform difficult because there are so many moving parts; more importantly, this lack of clarity creates a lot of confusion about what exactly we’re trying to fix.

Even if there were an obvious point for reformers to focus on—there would still be questions about whether those organisations should exist or be something else entirely (like another government entity).

Housing policy has a lot of winners and a lot of losers.

Why the term affordable housing is a con

The winners in this story are the people who own their homes, and the losers are those who rent. In other words, we’re talking about homeowners versus renters. And while not everyone can afford a house, most people over time have done.

However, in the past 30 years, that has slowly turned the other way with the massive increase in land value, making it impossible compared to stagnant wages. 

That’s why many rent-burdened households today and fewer young people own homes.

Renters who make below £30K per year cannot afford much unless they use a bank of mum and dad. 

As policymakers continue searching for solutions to the affordable housing crisis, it’s a generation of young people with no security and spiralling costs which continue to suffer. The term has become meaningless because it can mean many things to many different people.

But there is no doubt that families across the UK are struggling with rising rents. It isn’t just an issue of semantics—it affects millions of households paying too much money each month for shelter. Affordable housing exists, but it’s now taken up by a growing number of people who need it because wages and the cost of living spiral. 

But it’s not as simple as saying “build more houses!” or “make them cheaper!” 

Instead, we need comprehensive solutions that address supply and demand factors impacting housing costs, such as land cost, planning laws and housing choices. 

In our opinion, buyers and renters need more choice, that’s why we exist, to create Better Places to Live Co-designed by the people who will live in them.

Why not take our 1 minute quiz to see if you need a ‘better place to live


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Co-Founder A Fairer Society | + posts

Co Founder of A Fairer Society. Peter has a vision of living in a fairer society, where there's plenty to go around, where everyone has a voice in the issues that affect them, and where humans thrive togther.

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