What is Affordable Housing?

At CommonBond, we talk a lot about the importance of a home. We believe that home is the foundation for everything in life. Not only is it a place of comfort, rest, and community, but once people have the stability that a home provides, they can care for their families and go after their dreams.

Unfortunately, we also know that the reality for renters in our state and region remains difficult. A 2023 report from Minnesota Housing Partnership found that in every county in Minnesota at least one in four renter households pay more than they can afford for housing. And we know renters have similar struggles in Wisconsin, Iowa, and South Dakota.

Why is affordable housing needed?

Due to factors like inflation, rising costs of rent and childcare, stagnating wages, and more, our neighbors are struggling more than ever. And, according to a new report by the Joint Center for Housing Studies of Harvard University, half of renters in the U.S. – a record number – are cost-burdened, meaning they are paying more than 30% of their income on housing costs. Half of those renters are severely cost-burdened, paying more than 50% of income on housing (“America’s Rental Housing,” 2024).

And unfortunately, due to a lack of affordable housing in our region, homelessness is on the rise. When folks have to choose between necessities like groceries, medications, and rent, it becomes a precarious situation that can result in homelessness. Affordable housing acts as one critical support for people who are in this tough spot.

Affordable housing defined

Affordable housing is defined by the federal Department of Housing and Urban Development (HUD) as a dwelling that a household can receive – whether through rent, purchase, or other means – that costs 30% or less of the household’s income.

CommonBond provides affordable housing for households with incomes between 30-60% of the Area Median Income (AMI). CommonBond also provides permanent Supportive Housing for individuals and families who have experienced homelessness.

Racial disparities in housing

At CommonBond, we have committed to SAHF’s Racial Equity Pledge. A part of our commitment to taking an anti-racist stance is recognizing the history and lingering dynamics in the United States, and specifically in the housing industry.

According to a 2023 report from Minnesota Housing Partnership, 57% of Black renters experienced cost burden in housing, compared to 45% of white renters. And the gap in homeownership paints an even more vivid picture. While 78% of white households own their home in Minnesota, only 31% of Black households are homeowners.

Owning property is a primary way that people build wealth, and due to redlining and other state-sanctioned policies, far less advantage has been given to people of color to achieve success.

How does affordable housing help communities?

Preserving and building more affordable housing not only benefits our neighbors who rely on this housing – but investing in quality affordable homes also generates many social and economic benefits that help communities at large. In fact, a study by international accounting firm Ernst & Young examined CommonBond’s most basic service model and concluded that for every $1 spent, there were immediate savings to the public of $4.

Here are a few examples of how affordable housing benefits communities:

  • More money spent in local communities – When residents of affordable housing can make their rent payments, they’re able to spend more on local purchases and spend more at their nearby businesses, therefore boosting the economy.
  • Fewer evictions – Not only do evictions spark instability and negatively impact families for generations to come, but evictions also have a ripple effect on the community, harming its social and economic well-being.
  • Improved government infrastructure – With more residents able to pay property taxes, a local government can provide more for its citizens.
  • Less cost to taxpayers – Research shows that providing affordable housing is far less expensive than “alternate” housing such as homeless shelters, jail, prison, mental health facilities, and hospitals. In addition, affordable housing programs are paid for through a combination of grants, donations, and federal funds (taxes), whereas the cost for the alternative housing options falls on taxpayers.

Why does affordable housing matter?

Even though affordable housing positively impacts communities in many ways, at CommonBond, we believe that the most compelling reason to provide affordable housing is it is the right thing to do.

We want to see people flourish and achieve the goals they have set for themselves, and providing affordable, stable homes is key to making this happen. When our neighbors have the foundation of a home, so much is possible.

If you want to support our mission of providing stable homes, strong futures, and vibrant communities, learn how you can get involved and make an impact.

Our Impact

Every day, our supporters, volunteers, staff, and community members make our work possible. Below you can view our latest annual report with resident testimonials, stories of impact, program statistics, and financial information.