Why Affordable Housing Helps the Whole Community

One of the most common misconceptions about affordable housing is that it only benefits certain people—namely, property developers or low-income residents. Often, people believe that one or both of these groups are profiting, leaving both taxpayers and local communities worse off.

The reality of affordable housing is quite different. It’s true that developers and low-income households have a lot to gain from affordable housing properties, but so do local businesses, taxpayers, governments, and even entire neighborhoods. Here, we’ll walk through the ripple effect that happens in communities when new affordable housing is created, and why everyone is better off when all is said and done.

Industry Professionals
Since real estate developers are often the ones that get the most media attention when it comes to affordable housing, it’s easy to forget that the construction or renovation of affordable housing properties involves a host of other professionals in the housing industry. Builders, zoning and inspection officials, and a variety of contractors all benefit from having more work.

In addition, affordable housing developments will continue to generate jobs even after the building process has been completed. Once affordable housing developments are ready to be inhabited, they will need to be leased and operated by property managers, realtors, maintenance and security professionals, and more. “Communities are stronger when there is a balance of affordable housing. Families want the opportunity to work where they live, and to invest and engage with their neighbors,” said Jeff Larimore, Executive Director of Midlands Housing Trust Fund.

Local Businesses
Low-income housing developments bring an influx of new people to the neighborhood in which they’re located. These people, in turn, need goods and services—everything from groceries to haircuts to car mechanics, to name just a few. This increased demand means more profit for local business, as well as potential opportunities for new businesses to move into the area.

Moreover, living in a low-income housing development means that residents will likely have more disposable income than was previously the case. As a result, they may be more inclined to spend money on non-essentials like going out to dinner or family recreational activities.

Governments
According to the National Low Income Housing Coalition (NLIHC), it’s estimated that the addition of 100 affordable rental homes generates around $2.2 million in taxes and other forms of income for local governments. This is money that can then be reinvested in the community, improving the quality of life for current residents or increasing the area’s desirability for prospective residents.

Communities and Taxpayers
In addition to economic growth, residents will likely enjoy two other notable community benefits of affordable housing: safer neighborhoods and higher property values.

Research has shown that contrary to what many people believe, more affordable housing units are associated with lower crime rates and higher housing values. In particular, the study noted that violent crimes (like robbery and assault) showed a marked decrease. This, in addition to the fact that homeowners’ increased property values effectively increases their net equity, helping them financially.

Low-Income Families
For people who live at or below the poverty level, finding and maintaining stable housing can be a vicious cycle, one whose effects have an impact on every aspect of their lives.

The majority of low-income households spend more than half their income on rent, leaving little money left over for other things like groceries, healthcare bills, education, and transportation. As a result, they’re often forced to buy cheaper (and usually less nutritious foods) and skip routine checkups or postpone non-emergent medical procedures.

But while these sacrifices help save money in the short-term, they ultimately do more harm than good. Poor nutrition and postponed doctors’ visits often lead to chronic or severe illness, which is expensive to treat. In addition, children of low-income families have reduced educational opportunities, which translate to poorer professional outlooks and limited economic mobility later in life. Thus, the cycle of poverty repeats itself.

Ironically, higher levels of poverty can end up affecting everyone, not just low-income individuals. Unpaid medical bills incurred by uninsured individuals are often paid in part by government funds, a financial burden which is then passed on to taxpayers.