Urban Planning for

Affordable Housing
July 15, 2021

Dr. Myounggu Kang Dr. Jaebin Lim

University of Seoul Chungnam National University
mk@uos.ac.kr jb.lim@cnu.ac.kr

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from (Raw) Data
to Information/Report
to Plan and Action

• Data → Information → Plan/Action

• Examples will be shown in separate files

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Affordable Housing Basics

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Planning Basics and Housing
Livable City/Province/Nation
with Quality Housing
for All
at Affordable Price

As-Is To-Be
Current State continuous Future State
monitoring

Problem Solution
Gap between Action to achieve
As-Is and To-Be the desirable future

Data, Analysis, Evidence

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Terms used in the presentation
• Housing Demand (e.g., population, age, household formation, migration; income, job, economic development)
• Housing Needs
• USA’s Threshold: housing costs below 30 percent of income
• Calgary, Canada: 65% or less of the median household income and spend 30 % or more of that income on shelter
• EU’s housing cost overburden rate: the proportion of the population spending more than 40% of their disposable
income on housing

• Income (Personal Income, Family Income, Household Income) and Wealth

• Area Median Income (AMI)
• 30% AMI, 50% AMI, 80% AMI, 100% AMI, 110% AMI, 150% AMI

• Affordability: Housing Cost to Income Ratio (CIR)

• Housing Supplier
• Market (Privately Owned Housing)
• Privately Owned Subsidized Housing
• Public Housing
• Public Supportive Housing: housing with social services (e.g., homeless, disability)

• Housing Supply Ratio (HSR)

• Housing-to-Household Ratio (number of housing units per number of household; 105~110 or over)
• Housing-to-Population Ratio (number of housing units per number of people; 200~500 or over)

• Housing Tenure: Ownership or Rent

• Level of Housing Service
• Formal & Satisfactory (e.g., waster, sanitation, space, structure, security of tenure)
• Formal & Sub-standard
• Informal & Sub-standard 5
Scope of Affordable Housing Policy
Land Regulation
(Zoning, Growth Restriction) Housing Tenure
Building Codes
Construction Cost
Ownership Rent
* Transportation, Utility

High and
Market Performance
Middle Market Performance
Mortgage System
Income
Household
Income
Voucher/Credit
-
Low Subsidized Housing
(economic
Income Public Housing
development)
Supportive Housing

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Planning for Affordable Housing
1. Housing demand
1) Population trend and their economic status (resident characteristics)
2) Economic development trend
2. Housing supply
1) Housing stock analysis (inventory characteristics)
2) Housing supply ratio (HSR) trend
3. Housing gap analysis
1) Housing payment burden assessment
2) Housing needs assessment
3) Demand of new housing units
4. Housing Market Performance Analysis
1) Housing sales, new home sales, housing price
2) Building permits and completion
3) Housing construction cost
5. Institutional Environment Analysis
1) Land and building regulation, urban and regional plan, including new towns, etc.
2) Housing related policy and law analysis, including redevelopment, filtering, etc.
6. Affordable Housing Plan
1) Goals, objectives; evaluation and monitoring system
2) Actors and Actions; leadership, power and responsibility

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Data and Analysis

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1. Housing Demand
• Population (residents characteristics)
• Population trend and projections
• Population (change) by Birth, Death, Inflow, and Outflow
• Population (change) by Age
• Population or Household/Family (change) by Income (decile)
• Household trend and projections
• Household by type (e.g., single, couple, parent with child, etc.)
• Household by the number of members
• Household by household head type (e.g., father, mother) and age
• Household by Income and Expenditure

• Economy
• G(R)DP, G(R)DP per capita
• Job change
• Employment Rate
• Saving Rate
• Poverty Rate

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2. Housing Supply
• Housing inventory characteristics
• House by price (sale price, rent)
• House by size, number of rooms, number of bathrooms.
• House by service (water, sanitation, electricity, gas, heating, internet, etc.)
• House by form (single-detached, multi-unit, Apartment, etc.)
• House by structure (Reinforced concrete structure, Steel structure,
Wooden structure, etc.)
• House building characteristics (plot size, BCR, FAR, floors, parking lot,
earthquake resistance, etc.)
• House by level of service (formal & satisfactory, formal & sub-standard,
informal & sub-standard, etc.)
• House by housing supplier

• Housing Supply Ratio

• Housing-to-Household Ratio: number of housing units per number of
household
• Housing-to-Population Ratio: number of housing units per number of
people

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3. Housing Gap Analysis
• Housing Status
• Housing tenure
• Duration of stay
• Housing level of service
• Housing cost burden analysis
• Housing cost burden by personal/household/family income
• Housing cost burden by percent of expenditure on housing payment
• Housing cost burden by age
• Housing cost burden by household size
• Housing needs assessment
• Housing status by housing cost burden
• Housing status by income group
• Forecast affordable housing gap: gap between the number of
households by income and the number of housing units to meet the
income criteria. (e.g., difference between the number of hh of 80% AMI
and the housing units they can pay with 30% or less of their income.)

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Affordable housing gap:
An example
• There are 27 affordable units available for every 100 homeowner
households earning 30 percent or below of the median family income

Source: Affordable Housing Advisory Board. (2015).

2015 Housing Needs Assessment. State of Washington. 12
Affordable housing gap:
An example
• There are 29 affordable units available for every 100 renter households
earning 30 percent or below of the median family income

Source: Affordable Housing Advisory Board. (2015).

2015 Housing Needs Assessment. State of Washington. 13
Affordable housing gap:
An example
• Affordable housing deficits are concentrated around high-cost urban
areas

Source: Affordable Housing Advisory Board. (2015).

2015 Housing Needs Assessment. State of Washington. 14
4. Housing market performance
• Housing sale
• Number of housing sales
• Number of new home sales
• Housing price (index)
• Housing construction
• Housing permits
• Housing completion
• Housing construction cost
• Housing vacancy ratio
• Finance
• Housing investment
• Mortgage/Interest rate
• Outstanding mortgage
• Loans / non-performing loans

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5. Institutional Environment Analysis

• Master plan, regional plan, new town plan (e.g.

million housing project)
• Land regulation
• Growth limit
• Zoning
• Building code
• Housing related policy and laws
• Redevelopment/renovation/upgrade
• Filtering
• Tax incentives
• Subsidy
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Additional Consideration
• Geographic unit of data
• Nation
• Province
• Region
• Urban area
• City
• District
• Data over time: Historical and Projection Data
• Data update, data cleaning, data quality control
• Definitions and explanations (e.g., how to calculate the affordability index? Big homes vs. small
homes)
• Institutional setup (organization and responsibility)
• Privacy, private information protection (including level of detail, level of aggregation, etc.)
• Cyber security

* Urban planning should guide housing because housing-alone approach may cause other urban
problems such as pollution, congestion, unsustainable development.

* HREIS seems to have a subsidized housing management system

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Various Housing Affordability Indexes
Housing Affordability Proponent of Index Description
index
NAR Housing National Association Ability of median-income family
Affordability Index of Realtors to buy median-priced home

Variant Housing Local Realtors Percentage of households that can afford

Affordability Index to purchase a median-priced home

NAHB-Wells Fargo National Association Percentage of homes affordable

Housing Opportunity of Home Builders to median-income family
Index and Wells Fargo
HUD Guideline HUD Housing affordable if no more than 30% of
gross monthly income spent
on total housing costs
Housing Wage National Low- The hourly wage needed to afford the Fair
Income Housing Market Rent in a given area
Coalition
HR 3899 Definition of American Similar to NAHB except uses 150% of
Housing Affordability Homeownership Act median income rather than only median
of 1998 income 18
Source: Jewkes and Delgadillo, 2010; HUD, 2006; KRIHS, 2014; KRIHS, 2018
Various Housing Affordability Indexes
Housing Affordability Proponent of Index Description
index
Affordability Measure EPA Used to measure change in affordability
by MSA due to increase in compliance costs
associated with effluent regulation
Price Index of New US Bureau of the Measures changes over time in
One-Family Sold Census the sale price of new single-family houses
with the same characteristics
Federal Home Loan - Ability of lower-income households
Bank of Atlanta Lower- to qualify for mortgage
Income Housing On a modestly-priced home
Affordability Index
Shelter Poverty Stone(1993) Maximum amount available for housing
depends on household size and income
Quality Adjusted Compute number of households for which
Measure 30% would not cover cost of housing
Supply of Affordable Share of vacancy rates for units deemed
Housing Units affordable according to the Fair Market
Rent
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Source: Jewkes and Delgadillo, 2010; HUD, 2006; KRIHS, 2014; KRIHS, 2018
Various Housing Affordability Indexes
Housing Affordability Proponent of Index Description
index
Housing Affordability Ratio of housing units potentially
Mismatch affordable to households of a certain
income to number of households in that
income range
PIR, and RIR Price to Income Ratio, Rent to Income Ratio

RIR(H+T) Rent and Transportation Cost

to Income Ratio
Residual Income Evaluation based on whether it is possible
Measure to finance living expenses for a normal life
with the rest of the income after the
household has paid the housing cost as
income
in a standard house
Source: Jewkes and Delgadillo, 2010; HUD, 2006; KRIHS, 2014; KRIHS, 2018

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 Livable City/Province/Nation
with Quality Housing
Summary for All
at Affordable Price

As-Is To-Be
Current State continuous Future State
monitoring

Problem Solution Land

Housing Demand
Gap between Action to achieve Master Plan
Population
Economics
As-Is and To-Be the desirable future Zoning
Infrastructure
Housing Supply Market
Inventory Sales
Housing Construction Construction Cost
Finance
Gap Institution
Affordability Building Code
Needs Tax/Subsidy

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Thank You!

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