Housing affordability is often used interchangeably with “affordable housing,” which does not have a standard definition.  “Housing affordability”, in broad terms, measures how much housing (both owner- and renter-occupied) is affordable to all income levels. The term "affordable housing"  is most-often associated with housing dedicated to moderate- and low-income households. 

Note the usage of the term "affordable housing" varies by organization. It is essential to understand the context in which the term is applied when reading reports.  Here are some of the more common organizations' definitions.

• The U.S. Department of Housing and Urban Development (HUD) defines cost-burdened households as those “who pay more than 30 percent of their income for housing” and “may have difficulty affording necessities such as food, clothing, transportation, and medical care.”  In this definition, affordable housing could mean housing that fills the need for any household - regardless of income - to no loner be cost-burdened. 
  • HUD has several types of housing  - specific, unique housing programs - that would fall into a broad term of affordable housing. These housing programs are tied to a classification system based upon HUD's income tiers. This is where you may hear percentage terms, like "affordable to 30% AMI" come into play. See below for more information.
• The Illinois Affordable Housing Planning and Appeal Act (AHPAA) (310 ILCS 67) defines affordable housing as housing units that are affordable to homeowners earning 80 percent of the Area Median Income (AMI) and renters earning 60 percent of the AMI. This definition is unique in that it classifies the housing tenure (rent vs. own) distinctly.  The Illinois Housing Development Authority (IHDA) also uses this classification of affordability.
• Other definitions of “housing affordability” exist, including the Housing Affordability Index by the National Association of Realtors (NAR), the Housing Opportunity Index by the National Association of Home Builders (NAHB), and the Housing and Transportation Affordability Index by the Center for Neighborhood Technology (CNT).

As noted above, there are several ways to define affordable housing, and this concept continues to evolve. For example, there are ongoing debates which discuss limitations to defining affordability as a percentage of household income alone, although this remains the general practice. 

Other Key Terms and Concepts

• Area Median Income (AMI)  is the annual median household income for a specific geographic region. Figures are sourced from the US Census Bureau, and vary depending on the area or "geography".  AMI within Mount Prospect will differ from County or State AMI. HUD and IHDA calculate AMI on a regional basis for our metropolitan area.  AMI is essential in determining cost burden, and is a factor used by HUD and IHDA (along with other factors, see below) to determine housing program eligibility. 
• Cost-burdened households pay more than 30% of their household income on housing. Severe cost burdened is defined as paying more than 50% of one’s household income on housing. The 30-percent threshold is a benchmark used by many federal, state, and local entities for measuring housing affordability. This standard can be traced back to the Fair Housing Act of 1968 and the Brooke Amendment of 1969.
• Workforce housing has no standard definition. The broadest interpretation of the term is housing that is affordable to the local workforce. The term is often associated with housing dedicated to middle-income households who earn too much to qualify for traditional housing subsidies. The range of incomes included in this definition varies anywhere from 50 to 140 percent of AMI. This term is also controversial because of its implication that households making less than 50 percent AMI are not participants in the workforce.

The term "affordable housing" is used often as a substitute for naming specific housing programs. There are many different programs to help increase both availability and access to affordable housing. Here are some of the most common programs in place in our region. 

Affordable Housing Programs

Note the terms "extremely low-income", "very low-income" and "low-income" are specific terms both within IHDA and HUD. For example, IHDA defines "extremely low-income" as renters within 30 percent of the median income for the area. Refer to the Housing Affordability tab for income tables based upon the AMI in our region. 

IHDA Programs For Renters 

• Section 8 Program. Provides rental assistance to extremely-, very-, and low-income households living in participating properties.
•  Moderate Rehabilitation Program. Provides rental assistance to low- and very-low income households living in participating properties in Cook and Will counties.
• Rental Housing Support Program. Provides rental assistance to extremely low-income households living in participating properties.
• Long Term Operating Support Program. Provides rental assistance at select properties across the state.
• Section 811 Program. Provides supportive housing to eligible persons (18-61 years of age, at or below 30% of area median income) with disabilities. In addition, persons living in or moving out of a State Operated Development Center (SODC) to the community, persons at risk of institutionalization, and Consent Class members (Williams, Colbert, Ligas) are prioritized populations of the program.

Federal Programs for Renters 

• Housing Choice Vouchers (Section 8). Also known as Housing Vouchers, this federal program provides rental assistance for very low-income people who find their own housing in private homes and apartment buildings.
• Federally Subsidized Apartments. HUD's affordable apartment search can help you find subsidized apartments in Illinois. To apply or to reserve your spot on a waitlist, please contact the developments directly.

Other Housing Organizations

• Housing Authorities (or Public Housing Authorities) are government agencies created to provide affordable housing administered through HUD housing programs. Cook County housing authorities are local government agencies established to construct, own, operate, and manage public housing and other forms of subsidized housing for low-income residents in the county. Cook County ordinances establish Public Housing Authorities, and the local legislative body appoints the Cook County Housing Board. Learn more about the Housing Authority of Cook County.

Developer Resources

There are numerous programs that a housing developer could qualify for when seeking to construct affordable housing - either rental or owner-occupied. These programs can be local housing authority, county, state or federal programs. In general, these programs require expertise in navigating the program requirements both prior to, during and post-construction. Continual monitoring and reporting to the appropriate housing agencies is required - the developer must be able to provide these housing management services as a key component to its successful and compliant operation. 

For example, the following resources are listed on IHDA's website. Along with each are various qualifications and limits to the type of funding available. 

• Affordable Housing Tax Credits - Requires following the IHDA Qualified Allocation Plan (QAP)
• Construction Financing Programs & Soft Funds
• Permanent Supportive Housing Development Program - competitive at the State level and requires application approval

Learn more about developer requirements by visiting the IHDA website. 

Data to Determine Housing Affordability in Mount Prospect

The Illinois Housing Authority is a highly-referenced standard when examining housing affordability in our region; below are key data used to determine maximum rents and eligibility thresholds for certain housing programs. 

• The Average Median Income (AMI) for a household is $73,234 per year.  IHDA calculated an Area Median Income (AMI) for the region (including Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will Counties) using 2019 American Community Survey 5-year estimates.

IHDA publishes annual affordability charts for the Chicago MSA, with income limits adjusted for household size and rent limits adjusted for unit size. These charts are used for determining eligibility for IHDA programs as well as a “rule of thumb” for what constitutes an affordable unit in the Chicago MSA.

IHDA Maximum Annual Income Limits for Most of Its Housing Programs

IHDA Schedule of Maximum Monthly Gross Rents for Multifamily Programs

Mount Prospect Village Demographic Data

• Mount Prospect has a total population of 56,852, with a median household income of $79,733 and a poverty rate of 6.7%.
• About 61% of local units are single-family while 39% are multi-family. 69% of housing units in Mount Prospect are owner-occupied, versus 31% of housing units that are renter-occupied.

Village's Affordable Housing Share 

Every five years, IHDA estimates the proportion of housing units in each municipality in Illinois that are affordable to homebuyers at 80% of the Area Median Income (AMI) and renters at 60% of the AMI. The most recent data available are from the 2018 Report on Statewide Local Government Affordability which estimates 5,174 total affordable units in Mount Prospect, or roughly 25.7% of all units.

The table below indicates where the Village ranks in comparison to other communities. 

According to the Affordable Housing Planning and Appeal Act (AHPAA) (310 ILCS 67), local governments with less than 10% affordable housing share are required to submit an Affordable Housing Plan to IHDA; however, the agency has no authority to penalize or incentivize compliance with this statute.

Assessing Affordable Housing Need

HUD releases Comprehensive Housing Affordability Strategy (CHAS) data sets to examine housing problems and housing needs for low-income households. The most recent CHAS data set is based on 2018 census data; the breakdown of all Mount Prospect households by HUD income brackets is below. The most common type of household (44 %) in Mount Prospect are owner households earning more than median income (>100% AMI). The next largest group of households are low-income owner households (50 to 80% of AMI), which comprise about 16% of all households.

Income Distribution Overview

Owner-Occupied Affordable Housing Data

 Illinois Housing Development Authority (IHDA) estimates of affordable purchase prices for households at 80 percent AMI (average median household income) are shown in the table below. IHDA produces these estimates by dividing the HUD income limit by .36, which provides a rough approximation of an affordable purchase price and monthly mortgage payment that includes principal, interest, insurance, and assessments. These figures are not adjusted for the size of the housing unit.

Owner Occupied Affordability Table for Chicago Metro Area, 2021

The Village's Community Development Department conducted research on the sales of both single-family and condominium sales for the past five years. 

• Of 220 sales of single-family homes, 33 were purchased for less than $250,000. 
• Of 75 sales of condominium units: 11 sales were under $100,000,  21 sales were $100,000 - $150,000, 17 sales were $150,000 to $200,000 and 8 sales were between $200,000 and $250,000. 

In general, condominium ownership is more accessible to purchasers within 80% AMI; purchase price alone does not determine affordability. 

Rental-Occupied Affordable Housing Data

IHDA produces an Affordable Rental Unit Survey (ARUS) using Census data to estimate the number and percentage of affordable rental units by census tract in Illinois. These figures include dedicated and market-rate affordable rental units. According to this analysis, about 21% - or 2,406 rental units - in Village census tracts are affordable to households earning 60% of AMI (as highlighted in the table below). Note that some census tracts include areas outside of Mount Prospect’s boundaries.

Rental Affordability Table for Units in Mount Prospect Census Tracts

Market Rate Affordable Rental Units

The IHDA Table below shows affordable rents by unit type and household income level. The monthly rent range considered affordable to households at 60 percent AMI is $979 for a studio and up to $1,454 for a 3-bedroom unit. The Community Development Department conducted research on existing market rents both throughout the Village and within the downtown area. Research did not find any units available for rent with 4 or more bedrooms. 

IHDA Schedule of Maximum Monthly Gross Rents for Multifamily Programs

Market Rate Rent Survey Results

Dedicated Affordable Rental Units

Dedicated affordable housing comes in many forms, such as permanent supportive housing, subsidized rental, subsidized ownership, and rental subsidy programs. Below is a brief description of each type, and examples that are found in Mount Prospect. Households seeking placement or assistance typically submit applications to the managing entities to get on a waitlist – depending on the program, applicants may be on a waitlist for years. The applicants provide extensive supporting documentation to prove eligibility for the program (e.g. household income, disability status, age, etc.) Some programs require periodic recertification of household eligibility to continue receiving assistance. Programs may be administered by a variety of public and private entities, such as the local housing authority, real estate management companies, non-profit organizations, and local municipalities. Some subsidies are “attached” to the rental unit to provide perpetual affordability (e.g. units administered by public housing agencies), while others are provided to the household and can be used to make market-rate housing more affordable (e.g. housing choice vouchers).

Public Housing - HUD Housing Choice Voucher Program

All major apartment complexes in the Village accept HUD Housing Choice Vouchers for approved units. The Housing Authority of Cook County (HACC) administers the Housing Choice Voucher Program. There are 136 total voucher units located in Mount Prospect census tracts. Note that some census tracts include areas outside of Mount Prospect’s boundaries as the data are not available at the census block level.