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4 Mixed-Income Housing: Myth and Fact F or many communities, the development of mixed-income housing has success- fully addressed the scarcity of affordably priced housing. Long thought to be an issue only for the unemployed, the need for affordable housing is affecting more and more of the workforce. The sustained strong housing market in the United States in recent years has had its downside for many moderate- and low-income workers who, as a result, have faced escalating rents and home prices coupled with little to no income growth. In many metropolitan areas, working families are coping with a dwindling num- ber of choices for affordably priced housing—housing costing no more than 30 percent of a family’s gross income—that is within a manageable commuting distance to work.1 Recent figures illustrate this problem further, with 8.6 million renters and 6.4 million homeowners in the United States paying more than 30 percent of their incomes for housing, and/or living in structurally inadequate or overcrowded homes.2 In the last decade, much of the most successful affordable housing has been built as part of mixed-income housing developments or neighborhoods, providing stable, attractive communities with prices to accommodate the needs of a variety of households. This pub- lication profiles mixed-income housing that combines market-rate and publicly assisted units, as well as all market-rate housing offering a range of price points. While there is no single accepted definition of “mixed-income housing,” this publication considers devel- opments (achieved through a variety of policies and practices) that contain units that are affordable to households with different income levels, whether the households earn an above-moderate income, a moderate income (80 to 120 percent of the area median income (AMI)), a low income (50 to 80 percent of the AMI), or in some cases, a very low income (below 50 percent of the AMI).3 The idea of mixing incomes in residential settings is not new: urban neighborhoods traditionally have contained a mix of housing products suitable for an array of incomes. More recently, however, mixed-income housing has been recognized as a means to lever- age market forces to provide a secure, high-quality, well-maintained living environment while increasing affordable housing options for lower- and moderate-income households.4 As a result, mixing incomes has become a popular way to supply affordable housing options, increase absorption in large planned developments, revitalize urban neighbor- hoods, and decrease the concentration of poverty in publicly assisted housing. When located close to job centers and services, mixed-income housing provides more than just another housing product—it also activates smart growth principles by reducing travel times and congestion. Some examples of mixed-income housing illustrated in the profiles in this publication include: Master-Planned Communities:A larger-scale development (from several hundred to as many as 50,000 or more units) that often offers all market-rate prices but includes a mix of housing types at different price points and tenures, such as rental apartments, condominiums, townhouses, and single-family homes. Some master-planned communi- ties also successfully incorporate assisted housing.