By Taiwo Ajayi.
Affordable housing remains a subject often plagued by widespread misunderstanding among the public. Myths and misconceptions surrounding affordable housing developments tend to revolve around fear-based stereotypes, concerns about property values, and anxieties about neighborhood transformations—arguments frequently raised in opposition to new affordable housing communities.
In truth, the absence of safe and affordable housing carries a significant, multifaceted cost for U.S. cities. Cities that fail to address affordable housing challenges inadvertently push residents away, miss out on potential workers, and stifle local economic growth.
While individuals already living in secure housing may not directly experience the harsh realities of poverty, its effects cast a tangible shadow over our communities.
Escalating housing costs can stymie local economies, leaving jobs unfilled and reducing purchasing power within communities. Yet, the presence of accessible affordable housing ushers in a wave of opportunities for people across income brackets. It bolsters disposable income, channeling more funds into local businesses and encouraging long-term transformations. Let’s delve into some of the economic merits of affordable housing.
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Boosted Local Spending:
Arguably the most conspicuous economic advantage of affordable housing lies in the surge of discretionary spending. For many, rent constitutes the largest and most essential monthly expense. When the threat of income loss endangers one’s ability to cover rent, it diminishes the likelihood of spending on anything beyond the bare essentials. However, when residents of affordable housing can comfortably meet their rent obligations, they gain the capacity to invest more in local purchases.
This extends beyond mere necessities and encompasses expenditures on quality food, improved access to healthcare, and increased support for nearby businesses.
Reduced Evictions:
Approximately 108 million Americans reside in rental homes or apartments, and a quarter of these renters allocate over half of their monthly income to rent payments.
This precarious financial situation places millions on the brink of losing their homes due to minor unforeseen expenses. The sacrifices made by individuals compromising on healthcare, childcare, groceries, or education to make ends meet, intensified during the COVID-19 pandemic when the U.S. unemployment rate reached 10 percent.
The looming threat of eviction has always hung over those barely keeping up with their landlords’ demands. Now, it is a grim reality for many. The consequences of eviction initiate a cycle of instability for families, generating ripples that affect communities, harming both their social fabric and economic well-being.
This underscores the critical role of housing stability within the realm of affordable housing—it acts as a bulwark against evictions regardless of economic circumstances, with the social and economic returns outweighing the initial investment.
Healthier Population for a Healthier Economy:
Housing exerts a profound influence on an individual’s health, serving as a key social determinant alongside income and education. Housing quality stands out as an influential factor, with individuals in low-income housing that is inadequately constructed or maintained being exposed to hazards such as lead paint and water contamination, which more affluent populations largely avoid.
These environmental threats contribute to chronic health issues for families, children, and seniors, incurring significant and avoidable costs for both residents and their broader communities. Furthermore, unaffordable housing obstructs access to essential health factors such as nutritious food and medical care. Conversely, access to quality affordable housing reduces exposure to environmental threats and improves access to healthy food and routine medical care, thus mitigating the risk of severe chronic health problems. Increased spending on healthcare and fresh food stimulates local economic health.
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Job Creation:
Affordable housing exerts a substantial economic impact by generating employment opportunities, both during construction and over the long term as societies grow. Consider the economic ramifications of constructing new affordable housing. Real estate companies must engage manufacturing and construction firms to build these complexes. Subsequently, these housing centers require staff for maintenance, operations, and leasing, ensuring that the premises remain well-maintained to attract and retain residents. Moreover, affordable housing promotes improved mobility, resulting in increased job opportunities and overall societal growth in healthier economies. While some of these employment opportunities may be more immediate, the enduring benefits of affordable housing are profound and foster meaningful societal change.
Enhanced Government Infrastructure:
With more residents capable of paying property taxes, local governments can bolster their capacity to provide services to citizens. The National Association of Home Builders conducted a study revealing that “building 100 affordable rental homes generates $11.7 million in local income, $2.2 million in taxes and other revenue for local governments, and 161 local jobs in the first year alone.” This augmented revenue translates into improved infrastructure, additional green spaces, and other elements contributing to healthier cities, thereby enhancing the well-being and safety of residents.
Investing in the Future:
Another enduring economic benefit of affordable housing is the opportunity to reduce childhood poverty. Empowering children with a more equitable future is a long-term approach to fostering economic growth and healthier societies. Providing stable, affordable homes forms the foundation for this effort, enabling children to develop healthy habits and concentrate on their goals and education. Generationally, this yields significant impacts on educational attainment, economic productivity, and opportunities for residents to contribute to their communities. As per Mark Rank, a Professor of Social Welfare at Washington University, “It is estimated that for every dollar spent on reducing childhood poverty, the country would save at least $7 with respect to the economic costs of poverty.”
In conclusion, affordable housing is not just a social necessity but also an economic boon with far-reaching benefits. Its positive impacts extend beyond immediate financial relief, contributing to vibrant, resilient communities and fostering long-term economic growth and prosperity.
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