Affordable housing is a topic that is often misunderstood by the public due to stereotypes, misinformation and fear of negative changes that may occur to property values and the neighborhood. According to a report compiled by the National Low Income Housing Coalition (NLIHC), access to affordable housing has wide ranging, positive impacts. These effects vary from aiding employment and boosting community spending to improving the health and wellness of low- to mid-income level community members.
The toll poverty can have on a household can not be understated. Quality and accessible affordable housing benefits families, seniors, people with disabilities and the economy. By providing quality housing for people of modest budget, the region can experience a healthier population that is better able to spend residual income in the community, more employment opportunities and a better funded government. Best of all, these results help all income levels, so the entire community benefits.
A Healthier Population and Local Spending
Perhaps one of the most apparent elements of affordable housing is its impact on local spending in the community. When residents have affordable housing, they in turn have more residual income that can be used to put healthy food on the table and provide for the family.
The availability and quality of housing can affect a person’s overall health according to a study by Robert Wood Johnson Foundation. Lack of affordable housing puts significant financial stress on the family and can impact their mental and physical health. When forced into high living expenses, families, children, seniors and people with disabilities tend to lose out on essentials such as healthy food, medical care, heating and other basic needs.
Better access to affordable living benefits the economy by allowing a healthier population to have disposable income and more freely frequent local businesses, purchase property and take care of their essential needs.
Affordable housing is also linked to higher employment opportunities. As with market-rate building, research consistently shows that building affordable housing creates jobs both during and after construction through new consumer spending, according to a housing development report by Center for Housing Policy. In the study, they found that the initial development of affordable housing created both short-term and long-term employment opportunities in the local economy.
In a study by The National Association of Home Builders, they estimated that one-year impacts of building 100 multifamily rental units in a local area includes 161 local jobs, $11.7 million in local income and $2.2 million in taxes and other revenue for local governments. These local impacts are estimated for a typical metropolitan area or non-metropolitan county and include both the direct and indirect impact of the construction activity itself. Ongoing, annual local impacts include $2.6 million in local income, $503,000 in taxes and other revenue for local governments and 44 local jobs.
Government Infrastructure and Investments
As noted in the NAHB study above, building multifamily rental units in a typical metropolitan area or non-metropolitan county results in taxes and other revenue for the local government. As more residents move into affordable developments, the government is further funded and able to provide needed services. This can mean improvements in infrastructure, development of parks and other green spaces as well as other elements that impact the citizens’ health and safety.
Multifamily investors are also seeing the financial benefits to affordable housing. The high demand and lower competition in contrast to market-rate and luxury apartments is one major appeal. Affordable housing properties are also excellent at producing consistent, steady income from rent and, in many markets, are fully-occupied. Seen as dependable performers in the real estate investment space, they are often safer investments than conventional, class-A apartment buildings.
Though often misunderstood by the public, the economic benefits of providing housing for all income levels are apparent. With access to affordable multifamily housing, tenants can enjoy healthier lives and are more free to spend residual income on the local community, local jobs are supplied both during and after construction, and the government benefits from more taxes and other revenue that they can put toward public infrastructure.