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The Challenge of Supportive Housing: Unlike Other Housing Models, Supportive Housing Must Encompass Services

Three Housing Models:

(Roll over the models below for details)

Market-rate housing is reflected in the types of units for which rent is the going market rate or higher. The developer raises capital through bank loans and other investments. Rents are set at a rate that allows the developer to at least meet the debt requirements of the loans used to construct the units and maintain the upkeep and operations of the building.

Affordable housing targets households making 60 percent or less of AMI. “Affordable” means that rents are set at a rate that equals 30 percent of household income. To make the units “affordable”, governments may infuse low-interest grants, loans and tax credits into the construction costs which allows the tenant to pay below-market rent. Renters of affordable housing may also have rental subsidies. Not all projects are able to receive tax credits or rental subsidies because of high demand.

"Supportive housing" is affordable housing that targets extremely low-income households (30 percent or less of AMI) and provides services that this vulnerable population needs. Similar to affordable housing, households pay roughly one-third of their income toward rent, with the remainder government subsidized. Some services provided in supportive housing are not funded, however, and with no stable revenue source to pay for those services, particularly pretenancy and tenancy support, supportive housing providers often have to cobble together short-term or one-time grants to cover services, a solution that is not sustainable long term.

Note: Capital costs only apply to single-site supportive housing.
*AMI: Area Median Income