Ultimate Guide to Affordable Housing in Houston

Houston residents need better affordable housing options. PadSplit offers affordable private rooms for Members with incomes as low as $15,000 per year.

Houston is a city with a reputation for its affordable housing.

In fact, Houston ranks 3rd most affordable among major metro areas in the U.S. According to a Council for Community and Economic Research (C2ER) Cost of Living Index for Q3 of 2021:

  • Cost of living in Houston is 4.4% lower than the nationwide average.
  • Living in Houston costs less than 25.6% of the average of the most populous U.S. metro areas.

People flock to Houston for many reasons. The city offers career opportunities in high-skill fields such as healthcare and education. Residents can enjoy the warm weather and thousands of acres of parks and nature. Houston boasts a prominent art scene. And when it comes to the culinary arts, Houston’s iconic Tex-Mex, Louisiana Creole, Vietnamese, barbeque, and other diverse dining options are a foodie’s dream.

Houston offers these and many other appealing qualities that make it a place where many seek to raise their families.

Yet, in recent years, Houston has seen the same growing affordable housing crisis as countless other major cities in the U.S.

For low-income individuals, a long-term lease may be out of reach. Bad credit scores, prior evictions, or failing to meet the threshold for approval can all hinder people from acquiring safe and affordable housing.

With urban living costs going up in cities like Houston, housing options may be reduced to crashing with friends or family, low-cost motels, sleeping in a car, or even homelessness. While subsidized housing is an option for some, such as those on Social Security or disability, waitlists can leave people in the lurch.

Better affordable housing options allow those in dire straits to build stability and save money.

Whether you need a place to live or want to host a space for low-income renters, here’s everything you need to know about affordable housing in Houston.

What Is Affordable Housing?

Along with rent, families have to pay for food, clothing, and other critical costs. Affordable housing means they can pay for living costs using 30% or less of their gross income.

Whether or not housing is affordable is based on “AMI”—or the Area Median Income. AMI refers to the median income between the poorest and wealthiest households in a region.

·        See the AMI for the Houston Metro area in 2021 here.

High rent and other living expenses can lead to housing insecurity or homelessness. This can push low-income families out of high-rent cities and harm communities.

Affordable housing programs and policies in the U.S., such as those run by the Department of Housing and Urban Development (HUD), seek to address the housing needs of low-income families. Affordable housing projects can also stem from the state, local, or other sources such as nonprofits and private companies.

Affordable housing is a cost-effective way to combat childhood poverty and drive economic growth in cities like Houston. Lack of affordable housing costs the U.S. lost wages and productivity worth roughly $2 trillion per year.

According to the National Low Income Housing Coalition, “Researchers estimate that the growth in GDP between 1964 and 2009 would have been 13.5% higher if families had better access to affordable housing. This would have led to a $1.7 trillion increase in income, or $8,775 in additional wages per worker.

The need to improve affordable housing is a no-brainer. It improves economic mobility, drives job creation, and bolsters local economies.

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Houston’s Affordable Housing Crisis

Accelerated in part by the COVID-19 pandemic’s impact and a sluggish energy sector, Houston has seen a growing affordable housing crisis. Indications also show that affordable housing was shrinking even before COVID-19.

A 2018 Kinder Institute study revealed that:

·        47% of Harris County renter households spent over 30% of their income toward housing, classifying them as cost-burdened.

·        Of those 335,000 renter households, roughly 164,000 spent more than 50% of their income on rent, classifying them as severely cost-burdened.

·        The total number of cost-burdened renters in Harris County grew between 2010 and 2018 by 24%.

As a result of property values and rent going up, middle-income families who would’ve otherwise bought homes are stuck renting. Low-income families must make do with fewer options.

The Kinder Institute study shows that African-American families are especially vulnerable to a lack of affordable housing due to declining African-American homeownership in the city since 2008. Giving families better access to affordable housing bolsters Houston’s economy, provides the opportunity for economic mobility and builds a more equitable community.

Houston is only one of many cities across the country facing issues with affordable housing. The problem boils down to two main pain points.

Too Few Affordable Homes

The supply of affordable housing can’t meet the demand across the United States. Low-income families face a dwindling set of housing options.

A shortage of 7 million affordable and available rental homes leaves extremely low-income renters in jeopardy, according to 2018 census data cited by the NLIHC.

Nearly half the rental population, or 20 million households, were “housing cost-burdened,” the data showed. 10.8 million of those households used at least half of their income to pay for housing.

While millions of affordable homes have been built with funding from Low Income Housing Tax Credits (LIHTC), the pace of construction can’t keep up with the growing population of low-income renters.

Cost-burdened renters need better solutions and access today.

High Barriers to Access

Getting into a traditional rental agreement means navigating multiple roadblocks for low-income renters. Many rentals require a monthly income of three times the rent and minimum credit scores and a long-term commitment. You may also have to pay up-front deposits, an application fee, utility deposits, and more. Many rental agreements don’t cover utilities or internet.

Because of these barriers, many renters simply don’t have access to traditional housing options. Many may need to live in extended-stay motels or stay with friends or family. If the living situation of those friends or family members changes, their living situation falls apart too.

Beyond these options, renters may have no choice but to stay in illegal rooming houses as their only alternative to homelessness.

The affordable housing crisis is real. Whether it’s Houston or other cities across the United States, families need better access to housing so they can better their situations today. The question is what we can do about it.

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Affordable Housing Options in Houston

Like other cities, Houston offers affordable housing options such as the Housing Choice Voucher Program, public housing, and nonprofit or private options. Nearly half of all Houston residents are considered cost-burdened, meaning they spend more than 30% of their income on housing costs. To these Houstonians, affordable housing options such as these may seem like their only option.

Housing Choice Voucher Program

Houston provides housing choice vouchers (formerly Section 8) for very low-income individuals. This program is run by the Houston and Harris County Housing Authorities. Very low income is defined as a household earning below 30% of the median income in the Houston area, as defined by HUD. Housing options include single-family homes, apartments, duplexes, and other types of rental units.

The current adjusted annual income limit to qualify for a housing choice voucher in Houston is $26,250.

Unfortunately, new applications aren’t accepted until spots clear up. As of April 2022, applications for the housing choice voucher program are closed.

Traditional Rentals

Traditional rentals are often out of reach for low-income renters, as there are few affordable options throughout the city. High barriers to entry and long-term leases reduce access. The average rent for an apartment in downtown Houston is $2,071 per month. That doesn’t include the average of $2,400 in move-in costs or monthly costs like utilities and internet. The increasing financial housing cost burden on renters means they have less money to spend on other important resources like food and medicine.

Nonprofits

The City of Houston Housing and Community Development Department works with nonprofits focused on meeting the city's affordable housing needs.

A quick search reveals hundreds of nonprofits dedicated to providing services such as shelters and women’s centers, community outreach, mental health treatment and job training, housing for senior citizens, homeless veterans, and those with special needs.

HUD may approve nonprofits to purchase discounted HUD properties, apply for FHA-insured financing as owner-occupants, and provide secondary financing assistance to homebuyers utilizing FHA insurance.

Public Housing

Public housing includes single-family homes, apartments, and other kinds of rental units. Public housing provides affordable housing for low-income families, the elderly, and those with disabilities. The Houston Housing Authority owns and operates 25 public housing and tax credit developments, housing 5,500 Houston residents. The public housing waitlist is closed. There simply aren’t enough units to go around.

Housing for Veterans

HUD and the VA offer a variety of housing programs for Veterans. One example is the “U.S. Department of Housing and Urban Development-VA Supportive Housing (HUD-VASH)” program, which provides HUD housing vouchers and VA supportive services. These services can include health care, mental health treatment, and more for the families of veterans who are homeless. Other programs offered by the VA provide housing stability and rapid rehoming for low-income Veterans or those who are homeless, such as Supportive Services for Veteran Families (SSVF).

Find a furnished room for rent - all utilities included

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PadSplit: A New Approach to Affordable Housing

Low-income individuals benefit from many affordable housing programs run by their city, nonprofits, and private companies. But these programs can only do so much, and many can’t keep pace with demand. Many individuals can’t wait for a unit to open up, and they need solutions today.

Coliving offers an alternative to traditional affordable housing options. As opposed to staying with friends who may have sudden unexpected changes in their living arrangements, coliving offers a stable shared residence with other adult roommates. It provides an affordable weekly rent and may include other perks like utilities, internet, and other amenities.

PadSplit is a coliving membership program focused on financial rehabilitation and stability. A PadSplit room provides an opportunity to live affordably in a rental situation without high entry barriers and more flexibility.

PadSplit offers its Members many benefits including:

·        Cost Savings

On average, people seeking to rent an apartment in Houston will pay $2,400 just to move in. Finding an apartment under $1,000 per month, even in the most affordable areas of Houston, can be difficult.

PadSplit’s Members don’t face high financial barriers in order to qualify. You can get into one of our rooms for move-in costs as little as $129. Members pay $629 per month on average. Our Members also get free access to utilities, internet, telehealth services, and free credit reporting. You can qualify for PadSplit with an income as low as $15,000 per year, regardless of your credit score.

·        No Long-Term Commitment

PadSplit Members don’t sign a lease agreement binding you to a certain property for at least 12 months. You agree to a one-month living arrangement in one of PadSplit’s private rooms. After a month, rent is paid weekly. You can leave as soon as your situation changes.

·        A Safe Community

Living with others in a safe community can be a huge asset for PadSplit Members. Coliving lets you be part of a group with different experiences and perspectives. Building new relationships can have a meaningful impact, but PadSplit also offers Members a safe and secure living environment.

We run background checks and employment verification on all new Members. No other Members have key access to your private, locked room. When Members get into disputes and violate the rules, they can lose key access to PadSplit properties. Members uncomfortable with their PadSplit arrangements can transfer to a different location within the first two weeks, free of charge.

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Saving More Money Starts with Lower Rent

There are many pathways to saving money and being more financially responsible. When you can afford rent and other living expenses, it frees you up to pursue your financial goals and work toward a better future.

Saving on rent provides more freedom to pursue money saving goals such as:

·        Create a budget – Budgeting isn't easy when you can't afford basic necessities. Saving money on rent can help free up cash for other expenses. However, you can always make sure you get the most out of that savings with a monthly budget. A monthly budget allows you to track how much is coming and going out each month. It helps you understand how to get on track to save toward goals such as going back to school or buying a car.

·        Stop the bleeding – Once you create a budget, you can spot expenses that can be cut or reduced. For instance, budgeting for meals or otherwise setting spending limits can help you save toward goals that are more meaningful to you in the long run.

·        Use public transportation – Owning a car comes with many ongoing expenses, including monthly payments, repairs, tax and title, insurance, and gas. A majority of PadSplit properties are located nearby to public transit. Riding the bus or subway to and from work can save you thousands of dollars each year in transportation costs.

PadSplit Members save an average cost savings of $600 per month. This allows them to not only better plan their financial future, but to make it a reality. Use our Rent Savings Calculator to see how much you can save today.

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The PadSplit team brings decades of experience, with a shared passion for helping our community and a collective vision of empowering all of our Members to reach financial independence. PadSplit Members only pay one bill each week for a private furnished room, all utilities, free credit reporting, and access to free telehealth services. Members save an average of $420 per month. Contact us at (770) 373-7863 or support@padsplit.com to learn more.