Affordable Housing, Why it’s Important, and What’s Holding Us Back

Affordable housing is one of the most important topics today. Why? People who are struggling to find a place to live are forced to live in unsafe environments with low-quality living conditions. And it is well-known that these people are more likely to suffer from poor health and die at an earlier age than those living in higher-quality, affordable housing.

What is affordable housing? The U.S. Department of Housing and Urban Development (HUD) defines affordable housing as ‘housing that costs no more than 30% of a person’s or family’s income’, though this definition may be problematic. Why? 

A family that has an income of, say, $450k and pays 30% in rent, will have $300k to live on. Now take a family that has only $20k in savings, and pays 30% in rent. It only has $14k to live on. The two situations in which the two families find themselves are incomparable.

Affordable housing projects provide low-income families and people with disabilities affordable housing options and access to other resources such as jobs and schools. 

As well as alleviating homelessness and improving health outcomes, affordable homes offer stability to those who might not otherwise be able to afford it ─ and access to other resources, such as jobs and schools.

Affordable housing projects does not mean inferior quality housing

People often assume that affordable housing projects mean low-cost, poorly constructed homes, using cheap materials and cheap labor. 

While the cost of construction is low, it is not prohibitive to the building of low-cost housing solutions for sustainable living. The idea is not to build ghettos, but instead to deliver quality social housing architecture for better communities ─ residential properties that are made available to people of low-income at affordable prices. 

Types of housing projects

There are five major types of affordable housing projects:

  1. HUD project-based apartments ─ NOT the projects

HUD project-based apartments (sometimes called Section 8 buildings) will provide a safe and affordable place to live. Rent is capped at 30% of the occupant’s income, with buildings owned by private property owners who may also receive funding from HUD.

  1. Low-income housing tax credit buildings

Also owned by private property owners, these homes range from apartments to houses and hotels. Some of these affordable housing projects are offered in mixed communities, where not all buildings are classed as affordable housing.

  1. Public housing

Government-owned and operated by housing authorities, rent is usually set at 30% of income, though sometimes the quality of this type of housing project leaves something to be desired.

  1. USDA housing rural redevelopment

These are often like the low-income tax credit buildings, though are owned by private property owners in rural locations.

  1. Congregate housing and assisted living

Providing the building is HUD-funded, the rent will be set at 30% of income, though there may be additional charges for any services provided, such as meals or housekeeping.

Models of affordable housing

When we are constructing affordable housing, it is inevitable that we must consider the cost. This usually means thinking about the size of homes we are constructing and the materials we use to construct them.

Modern construction methods, among other construction trends, play their part, too. Off-site prefabrication and 3D-printing technology help to reduce build costs and reduce the time it takes to build modern homes.

Many houses that are considered affordable have a smaller build footprint, keeping the cost to build low and allowing builders to construct more homes in smaller areas. The construction models that are most generally used include:

  • Co-living and single occupancy units

Multi-unit buildings are small units often with shared communal facilities. These are typically constructed in high-density urban areas, for occupancy by single people or small families.

  • Manufactured homes and mobile parks

A mobile home sited on a permanent foundation and regulated by local governments. The issue with these types of affordable housing is rising land values.

  • Modular housing

Apartment blocks and single-family dwellings with component parts made in a factory before being assembled on site. Costs are reduced by reducing build time, and construction is less hampered by adverse weather conditions.

  • Mass timber construction

This is a greener form of construction, ideal for larger projects in which large wood panels can be used, as well as wood framing.

Barriers to affordable housing construction

Although the discussion about affordable housing has become more mainstream, and it is generally considered to be essential, especially in cities, there are still many barriers to affordable housing construction that restrict the availability of affordable housing.

The biggest of these is that affordable housing does not generate enough income. Constructors make less money when developing affordable housing projects. Property owners make less rental income. Local governments receive less property tax.

So, developing and providing affordable housing delivers crucial places to live, but at the expense of constructors’ profits, property owners’ incomes, and governments’ tax revenue. On the other hand, in the long term, they provide families with stability, helping to improve social and economic outcomes and create a more sustainable, long-term future for our cities and their residents. In turn, this should deliver improvements in long-term economic outlooks.

The big question is, how much importance should we place on creating sustainable cities with affordable housing at their heart?

At ACB Consulting, we are committed to helping improve the communities in which we live, work, and play – including how they are conceived, designed and created. To learn more, contact ACB Consulting.

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