DISCLAIMER: This blog is written by Marquette City Commissioner Evan Bonsall, who also serves as the Chair of the City of Marquette Ad Hoc Housing Committee. The views expressed in this blog are his own, and do not represent the views or imply the official endorsement of the Ad Hoc Housing Committee, the Marquette City Commission, or any of the individual members of the Ad Hoc Housing Committee or City Commission.
Q: What is the Housing Committee’s definition of affordable housing?
A: The Housing Committee did not use a single definition of “affordable housing” because Marquette’s housing needs and the issue of housing affordability are much more complicated than any single definition could ever hope to capture. In August 2020, the Housing Committee unanimously approved the following definition of housing affordability:
Housing is considered “affordable” for a particular household if that household spends 30% or less of their gross household income on all housing expenses. (i)
This 30% standard, while not perfect, is a very widely accepted definition of housing affordability that is used by the U.S. Dept. of Housing and Urban Development (HUD) (ii), the Michigan State Housing Development Authority (MSHDA) (iii), the Marquette Housing Commission (iv), and nationwide housing experts. It also has the important benefit of being simple and easy to understand.
However, it is important to keep in mind that this definition of housing affordability includes ALL housing expenses – in other words, not just a household’s monthly rent or mortgage payment, but also routine maintenance and repair costs, utility bills, internet service, property taxes, and so on. For example, a household earning the City of Marquette median income of $43,977 per year ($3,665 per month) could, according to this definition, afford to spend no more than $1,100 per month on housing, but their actual monthly rent or mortgage payment would almost certainly have to be significantly lower than this to be considered “affordable.” (v) After all, if they are renting, their monthly rent probably does not include certain fees or utilities, and if they are homeowners they will have to pay for utilities, insurance, taxes, and maintenance, not just their monthly mortgage payment. This is not only common sense, but it is also how the U.S. Census Bureau defines housing expenses. (vi)
Q: So are you just saying that all housing is “affordable”? How is this definition useful?
A: No, not really. Of course, all housing is technically “affordable” for someone, but the real question is “Affordable for whom?” After all, the Housing Committee’s sole purpose is to study the housing situation in the City of Marquette and make recommendations to the City Commission about how the City can promote housing affordability. The Housing Committee recognized that the 30% housing affordability standard is pretty much useless without anything to compare it to, so the Committee also approved specific definitions for “low-income housing” and “workforce housing.”
“Low-income housing” is defined by the Housing Committee as housing that is affordable for households earning less than 80% of the City of Marquette’s median income (v) – according to the latest Census Bureau data from the 2019 American Community Survey, this means households earning less than $35,182 per year. (viii) It is important to note that there is a very wide range of incomes and housing price points within this category. For instance, it is possible to find modest market-rate apartments in Marquette that are affordable for households earning close to 80% median income, while for households earning 30-50% median income, low-income subsidized housing such as Pine Ridge or Lake Superior Village may be the only option. Low-Income Housing Tax Credits (LIHTC) can be used to produce new low-income housing, and while LIHTC housing usually services households in the 60-80% median income range (ix), LIHTC developers can produce housing that is affordable for households earning as little as 30% median income– a great local example of this is Grandview Marquette (the old orphanage), which offers income-based apartments for households earning 30% to 80% of the area median income. (x)
“Workforce housing” is defined by the Housing Committee as housing that is affordable for households earning 80%-120% of the City of Marquette’s median household income. (xi) Workforce housing is essentially housing that is affordable for “working-class” or lower-middle-class Marquette households earning about $35,000-$53,000 per year. (xii) Households in this category will generally be more financially stable than those in the low-income category but still likely to be “living paycheck to paycheck,” and are also more likely to be able to consider homeownership as an alternative to renting.
Since releasing the Initial Report in January 2021 and hearing feedback from the public and the City Commission, the Housing Committee has identified a need to discuss these definitions of housing affordability in greater detail and determine what they actually mean in terms of dollars and cents. (xiii) What is the actual price range for owner-occupied homes in the workforce housing range? How much can a household earning 80% median income actually afford to pay in rent? How much could the same household afford to spend if they were looking to buy a home? I am looking forward to working with my colleagues on the Housing Committee to find specific, concrete answers to these questions over the next few months, and sharing those answers in the Final Report in June 2021.
(i) “City of Marquette Ad-Hoc Housing Committee Initial Report of Findings.” Ad Hoc Housing Committee, City of Marquette. 15 January 2021. Appendix A: Meeting Minutes, “Official Proceedings of the Marquette Ad Hoc Housing Committee, August 11, 2020,” p. 1.
(ii) “HUD’s Public Housing Program.” hud.gov, U.S. Department of Housing and Urban Development.
(iii) “Housing Trust Fund Rent Limits.” hudexchange.info, U.S. Department of Housing and Urban Development. Accessed via “Compliance Current Income and Rent Limits,” michigan.gov/mshda, Michigan State Housing Development Authority.
(iv) Marquette Housing Commission presentation, Marquette City Commission meeting, 8 February 2021.
(v) 2019 American Community Survey 5-Year Estimates, U.S. Census Bureau.
(vi) “Who Can Afford To Live in a Home?: A look at data from the 2006 American Community Survey.” Schwartz, Mary and Ellen Wilson, U.S. Census Bureau. 2008, p. 3.
(vii) “City of Marquette Ad-Hoc Housing Committee Initial Report of Findings.” Ad Hoc Housing Committee, City of Marquette. 15 January 2021. Appendix A: Meeting Minutes, “Official Proceedings of the Marquette Ad Hoc Housing Committee, August 11, 2020,” p. 1.
(viii) 2019 American Community Survey 5-Year Estimates, U.S. Census Bureau.
(ix) Marquette City Commission meeting, 8 February 2021.
(x) “Historic Orphanage Begins New Life as Affordable Housing in Marquette, Michigan.” huduser.gov, U.S. Department of Housing and Urban Development. 19 February 2019.
(xi) “City of Marquette Ad-Hoc Housing Committee Initial Report of Findings.” Ad Hoc Housing Committee, City of Marquette. 15 January 2021. Appendix A: Meeting Minutes, “Official Proceedings of the Marquette Ad Hoc Housing Committee, August 11, 2020,” p. 1.
(xii) 2019 American Community Survey 5-Year Estimates, U.S. Census Bureau.
(xiii) City of Marquette Ad Hoc Housing Committee Meeting, 9 February 2021.