The United Kingdom has a long tradition of promoting affordable social rented housing. This may be owned by local councils or housing associations[citation needed]. There are also a range of affordable home ownership options, including shared ownership (where a tenant rents part share in the property from a social landlord, and owns the remainder). The government has also attempted to promote the supply of owner occupied affordable stock for purchase, principally by using the land-use planning system to require that housing developers provide a proportion of lower cost housing within new developments[citation needed]. This approach is commonly known as inclusionary zoning
A high proportion of homes in the UK were previously council-owned, but the numbers have been reduced since the early 1980s due to initiatives of the Thatcher government that restricted council housing construction and provided financial and policy support to other forms social housing. In 1980, the Conservative government of Margaret Thatcher introduced the Right to Buy scheme, offering council tenants the opportunity to purchase their housing at a discount of up to 60% (70% on leasehold homes such as flats)[citation needed]. Alongside Right to Buy, council-owned stock was further diminished as properties were transferred to housing associations. Council Tenants in some instances have chosen to transfer management of the properties to arms-length non-profit organisations[citation needed]. The tenants still remained Council tenants, and the housing stock still remained the property of the Council. This change in management was encouraged by extra funding from central government to invest in the housing stock under the Decent Homes Program[citation needed]. The program required council housing to be brought up to a set standard was combined with restrictions on the amounts that councils could borrow and led to an increase in such arms length management organisations being set up. In some areas, significant numbers of council houses were demolished as part of urban regeneration programmes, due to the poor quality of stock, low levels of demand and social problems[citation needed].
In rural areas where local wages are low and house prices are higher (especially in regions with holiday homes) there are especial problems. Planning restrictions severely limit rural development. but if there is evidence of need then Exception sites can be used for people with a local connection. This evidence is normally provided by a housing Needs survey carried out by a Rural Housing Enabler working for the local Rural Community Council.
Housing associations are not-for-profit organisations with a history that goes back before the start of the 20th century. The number of homes under their ownership grew significantly from the 1980s as successive governments sought to make them the principal form of social housing, in preference to local authorities. Many of the homes previously under the ownership of local authorities have been transferred newly established housing associations, including some of the largest in the country. Despite being not-for-profit organisations, housing association rents are typically higher than for council housing. Renting a home through a housing association can in some circumstances prove costlier than purchasing a similar property through a mortgage.
The federal government in the U.S. provides subsidies to make housing more affordable. Financial assistance is provided for homeowners through the mortgage interest tax deduction and for lower income households through housing subsidy programs. In the 1970s the federal government spent similar amounts on tax reductions for homeowners as it did on subsidies for low-income housing. However, by 2005, tax reductions had risen to $120 billion per year, representing nearly 80 percent of all federal housing assistance.[7] The Advisory Panel on Federal Tax Reform for President Bush proposed reducing the home mortgage interest deduction in a 2005 report.[8]
Housing assistance from the federal government for lower income households can be divided into three parts:
“Project based” subsidies are also known by their section of the U.S. Housing Act or the Housing Act of 1949, and include Section 8, Section 236, Section 221(d)(3), Section 202 for elderly households, Section 515 for rural renters, Section 514/516 for farmworkers and Section 811 for people with disabilities. There are also housing subsidies through the Section 8 program that are project based. The United States Department of Housing and Urban Development (HUD) and USDA Rural Development administer these programs, and have further information on the particular programs on the agencies' respective web sites: HUD and USDA, Rural Development. HUD and USDA Rural Development programs have ceased to produce large numbers of units since the 1980s. Since 1986, the Low-Income Housing Tax Credit program has been the primary federal program to produce affordable units; however, the housing produced in this program is less affordable than the former HUD programs.
In the U.S., households are commonly defined in terms of the amount of realized income they earn relative to the Area Median Income or AMI.[9] Localized AMI figures are calculated annually based on a survey of comparably-sized households within geographic ranges known as metropolitan statistical areas, as defined by the US Office of Management and Budget.[10] For U.S. housing subsidies, households are categorized by federal law as follows:[11]
Some states and cities in the United States operate a variety of affordable housing programs, including supportive housing programs, transitional housing programs and rent subsidies as part of public assistance programs. Local and state governments can adapt these income limits when administering local affordable housing programs; however, U.S. federal programs must adhere to the definitions above. For the Section 8 voucher program, the maximum household contribution to rent can be as high as 40% gross income.[12]