What is the difference between affordable, workforce, and subsidized housing?

    Affordable housing means that, after paying housing costs, a household should still have enough money for necessities like food, health care, and transportation. The federal government considers housing to be affordable if a family spends no more than 30% of its income on its housing costs, including utilities. Policymakers consider households who spend more than 30% of their income on housing costs to be housing cost-burdened.

    Subsidized housing is housing that is made available at below-market rates with government subsidies. Lower-income households are at a great disadvantage when it comes to renting or buying market-rate homes. They may have to pay excessive portions of their income, crowd in with other families to pool resources or live in substandard conditions. That is why various government programs help households earning less than 80% of the Area Median Income (AMI) obtain decent, affordable homes. However, unlike other government programs, such as food stamps or Medicaid, housing subsidies are not an entitlement and are generally in short supply.

    Workforce housing is housing for the occupations needed in every community (teachers, nurses, police officers, etc.). Workforce housing is generally defined as housing affordable to households earning between 60 -120% of Area Median Income (AMI). Employees in some industries (e.g. retail sales, food service, tourism) are likely to be in the lower-income ranges. Seasoned workforce jobs with education or training requirements, such as teachers, police officers, nurses, etc., may fall into the middle-income brackets but still find it difficult to afford homes in the community where they work. Households who need workforce housing, and earn between 80-120% AMI, would not qualify for federally subsidized housing. This is why some communities establish local funding sources to support the development of homes for middle-income households.

    Who qualifies for subsidized housing?

    Various government programs help households earning less than 80% of the Area Median Income (AMI) obtain decent, affordable homes. Area Median Income at any percentage will vary by household size and HUD determines the % AMIs annually for each locality. Here is a full breakdown of AMI and household size for Blacksburg in 2022. 

    Area Median Income Limits

    Persons in Family







    30% Limits







    40% Limits







    50% Limits







    60% Limits







    80% Limits







    100% Limits







    120% Limits







    Why is affordable housing important?

    The Town of Blacksburg has become a major employment and amenities center in the New River Valley. As a result, Blacksburg is also the highest-priced housing market and copes with the greatest market pressures. Many working families are choosing between paying exorbitant housing costs to live in Blacksburg close to their jobs or enduring lengthy commutes from areas outside of Blacksburg with more affordable housing. Of the 21,000 people who work in Blacksburg, 3 out of 5 (15,900) currently live outside of Blacksburg.

    • More affordable homes within Blacksburg would provide more opportunities for households from all sectors of our local workforce to live close to where they work. This would improve the quality of life for all those who contribute to our community- more time spent with family, greater investment in health, food, and activities.
    • More affordable homes in Blacksburg would provide employers with a greater ability to attract and retain employees.
    • More affordable homes would benefit the community in terms of reduced traffic congestion, air pollution, and road maintenance costs. It would also enable increased investments in public transportation, sidewalks, and trails.

    Should we focus on affordable rental or homeownership opportunities?

    BOTH! To meet the diverse needs of our community, both affordable rental housing and homeownership are important. 

    Rental homes fulfill the needs of many families. For some, especially low- and moderate-income families in high-cost markets like Blacksburg or families who have recently lost a home to foreclosure, renting is the most financially realistic option. Other people rent because they prefer the lifestyle of renting or don’t want to worry about the hassle or costs of lawns, gutters, and home repairs. Finally, for some families, affordable rental housing is an important stepping stone that allows them to accumulate savings and prepare for homeownership.

    Homeownership can be a stable and affordable option when the mortgage terms and home price are within reach of a family’s budget. For many working families, homeownership represents the American Dream. Aside from comprising their largest financial asset, homeownership provides security from unwanted moves and control over features of their home. Homeowners can also provide stability to the neighborhoods in which they are invested.

    For these reasons, the Town of Blacksburg is working to provide more affordable rental and homeowner housing stock to meet the diverse needs of all families in our community.

    What funding sources currently exist to support the development of affordable housing? What are the limitations of these sources?

    The following are federal funding sources, administered by state and regional organizations:

    • The Housing Choice Voucher (HCV) program provides rent subsidies for families earning less than 50% of AMI.  The program requires participants to pay 30% of their household income as rent and the program pays the rest directly to the landlord. Housing Connections manages the voucher program and their waitlist for vouchers is long, due to the high demand for a limited quantity of vouchers. Even if a participant qualifies and receives a voucher, they struggle to find housing in Blacksburg, since most rental units cost more than the allowable maximum rent per bedroom, established by the federal government for the voucher program.
    • The Low-Income Housing Tax Credit (LIHTC) program subsidizes the acquisition, construction, and rehabilitation of affordable rental housing for low- and moderate-income tenants. This program accounts for nearly 90% of all affordable housing units in the country. Families earning below 80% of AMI are eligible to apply for a unit. The LIHTC program, administered by Virginia Housing, is very competitive. Unlike other parts of the Commonwealth, the New River Valley has to compete with 4 times the number of localities (60 other counties) for 15% of the credits available in the Commonwealth. Successful projects must be able to demonstrate lower development costs per unit, which are typically achieved through the donation of land or buildings, a higher density project, and/or substantial financial commitments from other sources.  
    • Emergency Solutions Grant (ESG) programs provide support to families that identify as homeless or who are in imminent danger of becoming homeless. This program includes short-term or medium-term rental assistance and housing relocation and stabilization services (mediation, credit counseling, security deposits, utility deposits, utility payments, moving cost assistance, and case management). New River Community Action facilitates this program but often finds trying to rehouse families in the Blacksburg area next to impossible due to the lack of affordable housing options within the price range the voucher allows.

    The following programs are federal sources administered by the Town of Blacksburg’s Housing and Neighborhood Services office:

    • The HOME program provides funding to The New River Valley HOME Consortium to support the construction and rehabilitation of homeownership or rental housing for households earning at 80% or below AMI. The Town of Blacksburg provides staff support to the HOME Consortium to help work with all member localities in administering HOME funds. NRV localities receive funds on a rotating basis and the amounts provided are based on the size of their total population. New River Valley HOME funds have leveraged more than $35 million of additional funds to support the development of 358 homes in the NRV since the HOME Consortium’s inception in 2007. Examples of HOME projects within the Town of Blacksburg include eight rental apartments for people 55 and older on Grissom Lane in Blacksburg, completed by Community Housing Partners in spring 2014, and seven new owner-occupied townhomes on the corner of Hemlock and Church St. completed in 2020 by NRV Valley Habitat for Humanity. This has been a successful program, but the level of funding means that not all projects ready for support can be funded.
    • Community Development Block Grant program supports community development activities such as real estate acquisition, relocation, demolition, and rehabilitation of housing. These funds can also be used for the construction of public facilities, improvements (such as water, sewer, and other utilities, street paving, and sidewalks), and support for a variety of public services. In 2015, the Town of Blacksburg committed $1.5 million towards a five-year pilot acquisition-rehab program to address housing issues in the Bennett Hill/Progress Street Neighborhood. This program converted seven rental properties into affordable homeownership opportunities. The sale of these homes includes a 99-year resale restriction, which limits the resale price and requires the home to be an owner-occupied, income-eligible household. Although impactful, this program required a high capital investment per home and family served. 

    What does the Town’s Housing and Community Connections Office do to support affordable housing?

    The Housing and Community Connections office supports the creation and maintenance of affordable housing in three ways:

    Technical Support: The office conducts research on best practices to inform, develop, and implement programs that can help the Town further its affordable housing goals, as defined in the comprehensive plan.  It leads efforts to both inform and engage the community in housing and community development-related activities. It provides citizens in need of affordable housing with guidance on resources available within the region. Lastly, the office also helps affordable housing developers to understand and comply with HOME, CDBG, and local rules and requirements and to problem solve throughout the life of an affordable housing project.

    Lender:  The office administers two U.S. Department of Housing and Urban Development (HUD) programs, the Community Development Block Grant (CDBG) program and the HOME Investments Partnerships program. The office also serves as the lead entity for the HOME program which assists with the construction, buying, and rehabilitating of affordable housing for rent or homeownership. The office is responsible for ensuring all projects funded through these programs comply with federal, program-specific, and local standards. The office undertakes a subsidy layering and cost reasonable analysis for any HOME or CDBG project to determine if the development costs are reasonable, if the project has sufficient cash flow to remain viable over 30 years, and can be well maintained. It also monitors these projects over time.

    Partner: The office initiates and supports regional dialogue and coordination with other federal/state/local government, business, education, and nonprofits partners interested in advancing issues related to housing affordability.

    What are the primary challenges to building more affordable housing?

    Four major barriers affect affordability throughout the U.S. and are relevant to Blacksburg.

    • Zoning ordinances that restrict density, building height, and land-use alternatives. A 2020 Brookings Institution analysis noted that affordability could be improved by reforming land use regulation to allow for smaller, more compact housing. Many of the Town’s local zoning laws mandate limits on building height, unit size, and land-use options with the intent to promote single-family homes and low-density impact affordability.
    • Inadequate incomes for market-rate, single-family homes, and apartment rentals. According to a 2021 Joint Center for Housing Studies report from Harvard University, the median-income renter could not afford monthly payments on median-priced homes in more than half of U.S. states, and households with moderate to high incomes struggled to buy homes. The report said: "Although long the plight of lowest-income renters, cost burdens have moved up the income ladder." CoreLogic, a data analytics firm, recently reported that U.S. single-family rent growth increased 8.5% in July 2021, the fastest year-over-year increase in 16 1/2 years, further illustrating pressures from a limited housing stock and insufficient earnings. Between 2019-2021, rents have risen by 4.3% and sales prices by 11.3% in Blacksburg. 
    • Rising costs that make building homes more expensive. Delays and higher material, land, and labor costs are contributing to rising home prices. Land costs typically account for roughly 10% to 20% of total development costs. In Blacksburg, there are few large parcels with access to utilities left to develop, so scarcity of land has driven up land prices. The parcels that are left have challenges due to grade or access and become more expensive to develop.  Hard costs, including construction labor and materials, account for 50% to 70% of construction costs. Higher demand for materials nationally, in addition to supply chain impacts due to Covid and local labor shortages, are resulting in an averaged 30% increase in development cost.
    • Need has outpaced investment in affordable housing. The public funding available through federal sources for affordable housing is currently insufficient to make a dent in the housing need. Federal sources also require a certain level of density to ensure that development costs are spread over more units and therefore are less expensive. If our community prefers single-family zoning, it will require a greater local investment in affordable housing development to meet the need.