What does "affordable housing" typically refer to in terms of income percentage?

Affordable housing is commonly defined as housing costs that do not exceed 30% of a household's gross income. This benchmark has been widely adopted by various government agencies and organizations in assessing housing affordability. The rationale behind this 30% threshold is rooted in the belief that spending beyond this proportion of income on housing can lead to economic strain, limiting a household's ability to pay for other essential needs such as food, healthcare, and transportation.

This guideline is important for multiple reasons: it helps in identifying households that may face housing insecurity or be at risk of financial distress due to disproportionate housing costs. By using this standard, policymakers and social programs can better target assistance to those who truly need it, ensuring that families can maintain stable housing while also managing other necessary expenses.

In summary, the 30% rule serves as a vital measure that recognizes the balance needed between housing expenses and overall financial health, making it the correct choice in understanding the definition of affordable housing.