Subsidized housing is government sponsored economic assistance aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. Forms of subsidies include direct housing subsidies, non-profit housing, public housing, rent supplements, and some forms of co-operative and private sector housing. In the United States, subsidized housing is often called "affordable housing." There is scientific research suggesting that actions to facilitate people's access to housing contribute to lower poverty.
Some co-operative housing may offer subsidized units, but its main mandate is not subsidization. Its operating mandate is to offer non profit housing, where the rents or housing charges as they are called, goes back into the maintenance of the building instead of the profit of a landlord. Co-operative housing is controlled by the members of the co-op, which is run by a board of directors. There is no outside landlord. In most cases, all residents of the co-op become members and are owners, and agree to follow certain by-laws. Some co-ops are subsidized housing because they receive government funding to support a rent-geared-to-income program for low-income residents. There are other co-ops that are market-rate and limited equity, these types of cooperatives do not receive government funding and are not subsidized housing. In addition to providing affordable housing, some co-ops serve the needs of specific communities, including seniors, artists, and persons with disabilities. Examples of co-operative housing include: College Houses, Urban Homesteading Assistance Board, and Habitat '67, and regular rental housing be they regular looking apartments, townhouses or high end buildings such as those overlooking Central Park in New York City.
The largest housing subsidy in the US is the home mortgage interest deduction, which allows homeowners with mortgages on first homes, second homes, and even boats with bathrooms to lower their taxes owed. The cost to the federal government of the mortgage interest deductions in 2018 was approximately $25 billion, down from $60 billion for 2017 as a result of the Tax Cuts and Jobs Act of 2017. Some states also have the mortgage interest deduction provision. The majority of the home mortgage interest deduction goes to the top 5% income earners in the United States.
Some housing subsidies are also provided to low income tenants in renting housing. These include shelter allowances, housing supplements, and shelter supplements from regional and local governments designed to help low-income households that spend a large proportion of their income on rent, such as New York City's Family Eviction Prevention Supplement program. The subsidies are often defined by whether the subsidy is given to the landlord and then criteria are set for the tenants they can lease to or whether the subsidy is given to the tenant, typically as a voucher, and they are allowed to find suitable private housing. The subsidy amount is typically based on the tenant's income, usually the difference between the rent and 30% of the tenant's gross income, but other formulas have been used. In rare cases a financial institution or non-profit organization will provide mortgage loans at rates that are not profitable for the sake of a specific group. In Canada one such organization is Non-Profit Housing Subsidies Canada which provides subsidized mortgage loans to employees and volunteers of other non-profit organizations.
Non-profit housing is owned and managed by private non-profit groups such as churches, ethnocultural communities or by governments. Many units are provided by community development corporations. They use private funding and government subsidies to support a rent-geared-towards-income program for low-income tenants.
Rent supplements are subsidies paid by the government to private landlords who accept low-income tenants. The supplements make up the difference between rental "market price" and the amount of rent paid by tenants, for example 30% of the tenants income. A notable example of a rent supplement in the United States is Section 8 of the Housing Act of 1937. According to a 2018 study, major cuts in rental subsidies for poor households in the United Kingdom led to lowered house prices.