Yet another government-subsidized "affordable housing" project is going up downtown, with the Mayor and other high-rollers attending the big kick-off ceremony last week.
Built to help address the city’s shortage of affordable homes, most of the building’s 19 new condominiums will be affordable to households earning less than 80 percent of the area median income.The building will be three stories, with units ranging in size and price from studios (beginning at $165,000) to three-bedrooms units (beginning at $300,000).
Yet again I’m finding the definition of "affordable" to be pretty questionable. Assuming you managed to come up with the $60,000 down payment, the monthly payment on the $240,000 loan for that "affordable" $300,000 three-bedroom condo would be nearly $1,600. Given the standard for "affordable" as 30% of gross income, someone a family would have to be making $64,000 to "afford" that kind of payment. Considering that the median income in King County is around $55,000, that "affordable to households earning less than 80 percent of the area median income" bit must be using some kind of fuzzy math. The way I figure, eighty percent of $55,000 is $44,000, and thirty percent of that (per month) is $1,100, which would be the monthly payment on a $165,000 loan (or a $206,000 home if you had the 20% down).
So $165,000 = affordable. $300,000 = I could maybe barely afford that if I could pull $60,000 out of my… hat—but someone making 80% of the "area median income"? Yeah right.
(P-I Staff, Seattle P-I, 03.03.2006)
Yup. You’re right. It’s not even close to affordable.
If this economy is ever going to grow and get strong again, we’ve got to get back to the real meaning of housing that is affordable.
The past 8 years have been a disaster for the US economy and it won’t get any better til this nonsense of overinflated housing costs ends.
Everyone goes ballistic when the price of gas goes up 50 cents a gallon but not even a peep when the cost of housing doubles in a couple years. It’s a disaster.