Sometimes some semblance of rationality is given to the phrase "affordable housing" by comparing the cost of housing to the income of those who live in it. That was certainly what I did when I rented my first room. That's not rocket science, then or now.Buying a home that one can afford without the need for government intervention in the form of subsidies or Congressional pressure on lenders to give loans that aren't likely to be repaid seems to have become passé. Using real cash money as a down payment had also fallen by the wayside. Somehow 100% financing, meaning no down payment, became the norm for so many that few questioned the concept in the not so recent past. Now it seems ludicrously risky for any lender to give those kind of terms, seeing what the outcome of such an arrangement has been.
The difference is that today there is some arbitrary percentage of one's income that sets the limit to what the government will consider to be affordable housing. It used to be 25 percent but it might be 30 percent or some other proportion.
But, whatever the percentage, it is no longer the individual's responsibility to choose housing that fits within that limit. It is somehow the taxpayers' job to make up the difference, when someone chooses housing whose cost exceeds that magic number.
My wife and I were fortunate, having the means to make a substantial down payment on our present house. We didn't get a palatial home even though we could have easily gotten a place that cost $100K or more above what we paid. But we couldn't have really afforded the payments even though we qualified for a mortgage worth twice as much as the value of our house. (That's another story illustrative of the financing insanity that prevailed during the housing market bubble.) We can make the payments on our mortgage because we didn't make the mistake so many others did. And our payments, not including taxes and insurance, total about 27% of our disposable income.
We bought a house we actually could afford, just like folks in the 'olden days'.
Like Thomas Sowell has done throughout his adult life, we bought affordable housing. If we end up buying another home in the future, it too will be affordable. It will likely be smaller than the one we have now, but so what? It will meet our needs and, in the end, be affordable. No mansion. No 4000 square foot monstrosity. No polished granite countertops with stainless steel appliances and Italian marble flooring. Just a nice place we can call home that won't bust our budget.
If more people had done it the old fashioned way, the housing bubble and concomitant financial collapse would never have occurred.