Workforce housing

Workforce housing is a term that is increasingly used by planners, government, and organizations concerned with housing policy or advocacy. It is gaining cachet with realtors, developers and lenders. Workforce housing can refer to any form of housing, including ownership of single or multi-family homes, as well as occupation of rental units. Workforce housing is generally understood to mean affordable housing for households with earned income that is insufficient to secure quality housing in reasonable proximity to the workplace.

Consideration of workforce housing includes these four principal factors:

The term "workforce" is meant to connote those who are gainfully employed, a group of people who are not typically understood to be the target of affordable housing programs. Workforce housing, then, implies an altered or expanded understanding of affordable housing. Workforce housing is commonly targeted at "essential workers" in a community i.e. police officers, firemen, teachers, nurses, medical personnel. Some communities define "essential" more broadly to include service workers, as in the case of resort communities where one finds high real estate costs and a high number of low-paying service jobs essential to the local economy. Workforce housing may be targeted more generally at certain income levels regardless of type of employment, with definitions ranging from 50% to 120% of Area Median Income (AMI).

Mortgage lenders typically impose a limit of 28% to 36% of household income allowable for principal, interest, taxes and insurance (PITI). Pricing calculations aimed at renters, who represent approximately one third of US households, define a desirable workforce housing cost as at or below 30% of household income. Affordability is a function of the relationship between one's income and the housing costs of the area, which leads to variation in the percentage of AMI that may be used to describe people who might need workforce housing.

Most appropriately, "workforce housing" is located in or near employment centers. The expanding distance between gainful employment and housing made affordable by the income it provides has caused people to seek housing on the periphery of settled areas. This is cited as a contributor to urban sprawl, typified by traffic congestion, lengthy commutes, convenience stores and strip retail centers, and the rapid consumption of open space due to the building of new homes taking place at the outer edges of metropolitan areas where land is typically cheaper. While prevalent in US metropolitan areas, workforce housing issues may arise anywhere that land values or other restrictions on creation or availability of quality affordable housing units are constrained by zoning, market forces or physical boundaries.

...
Wikipedia