Supporting affordable housing efforts may seem like an obvious choice for many, but it is important to remember that there are many others out there that are on the fence with these issues. With so much information coming into a person’s life every day, persuasive messaging needs to be both memorable and understandable. One strategy for imparting the idea that affordable housing benefits not only the individual, but society at large is to succinctly lay out the economic arguments behind the movement.
More and more Americans are finding that home prices have become so high that they can no longer buy or rent a place to live. Besides existing government programs to help homebuyers purchase homes, there are specific programs that focus on the financial and economic impacts of affordable housing initiatives. Though affordable housing programs do have a cost, these costs are not one-sided. There are, of course, the costs to provide affordable housing alternatives, but there are also costs in not having sufficient housing that is affordable.
Working through the myriad of reports, studies, survey findings on the subject can be challenging, particularly when one tries to keep the discussion apolitical. Here are some of the more powerful economic arguments that would seem to support providing affordable housing.
The Magnitude of the Problem
There are approximately 19 million households in the United States with incomes low enough to qualify for housing assistance. Of these, however, only about 4.5 million (24%) receive housing support because there aren’t enough affordable housing units available. Another report states there is a shortage of 7.4 million affordable rental homes for renters with extremely low incomes.
While the lack of affordable housing has an obvious human and social impact, our goal here is to focus on the economic implications, of which there are many.
Costly Alternatives to Affordable Housing Initiatives
Those without affordable housing options often end up elsewhere like homeless shelters. Many homeless may also suffer from other things than simply not having a place to live. They may need medical assistance and/or have mental issues that need attention.
A research project conducted for the Corporation of Supportive Housing (CSH) in 2004 detailed some of the daily costs of these alternatives. The study focused on nine major metropolitan areas with similar results.
In Chicago, for example, the daily costs of supporting affordable housing was $33.45. Every “alternative” was more expensive.
• Shelter: $40.28/day
• Jail: $91.78/day
• Prison: $117.08/day
• Mental Hospital $541.00/day
• Hospital: $1,770.00/day
Economic Benefits of Providing Affordable Housing
While many focus on the costs of affordable housing initiatives, they also offer some significant financial and economic benefits. A report from the National Low Income Housing Coalition (NLIHC) says that in 2015 alone, over a half-million jobs were created or supported through HUD investments.
The report also demonstrates some of the other powerful impacts of affordable housing. It projects that the creation of 100 affordable rental homes would generate almost $12 million in local income, over $2 million in taxes and other government funding along with over 160 jobs in the first year.
Unfortunately, the report also showed that, when adjusted for inflation, housing and community development funding was 8.4% lower in 2016 than it was in 2010.
Along with a sizable dollar for dollar return on investment, affordable housing initiatives often impact communities in other ways. They can lead to more green space, a stabilization of housing values and spur other economic investments in a neighborhood. They can inject new life and energy into an area. These ripple effects can all have a positive financial impact in a community, albeit a little more challenging to track.
It is important to note that the quality of housing, attentive maintenance and management also contribute significantly to the value of affordable housing in an area. A property that is not well-maintained or managed properly will have short-term and minimal positive effects.
Getting More Information
There are plenty of resources available to learn more about the economic impact of affordable housing initiatives. They include:
While the discussion on affordable housing can often be divisive, focusing on the economic impacts of the movement can be enlightening for many. It may also serve as an inspiration for more involvement.
Ryan Tollefsen is the founder and team leader of Unity Home Group.