The U.S. has a dire shortage of affordable housing. Currently about 20 million households qualify for housing assistance. Of these households, about 25% receive support because housing is still too high-priced. Another report shows that the country lacks about 7.5 million affordable rentals for low-income renters.
Obviously, this fact is a serious social problem. However, the cornerstone of providing low-cost housing also impacts the economy. Let’s look at some of the implications.
Homelessness affects many people in varying ways. Because of his or her situation, a homeless person may require medical care or have a mental illness. Therefore, it costs more to cover the effects of homelessness than it costs to provide affordable homes for low-income people. For instance, a 2004 research study, provided by the Corporation of Supportive House (CSH) showed that alternative forms of daily housing costs were more than the cost of affordable housing.
By providing affordable housing, the daily cost ran, on average, $33.45 in Chicago. Daily expenses for alternatives housing are listed, as follows:
- Another form of shelter – $40.28 per day
- Jail – about $92.00 per day
- Prison – around 117.00 per day
- Mental health facility – about $540.00 per day
- A hospital stay – approximately $1,770 per day
As you can see, the above alternatives were poor substitutes when providing affordable housing makes more sense. To subject people to the fear and deprivation of homelessness only breaks down the pillars of economic growth. The long-term effects, economically and socially, can lead to some devastating outcomes.
By providing affordable housing, the government also creates more jobs. One report compiled by the National Low Income Housing Coalition (NLIHC) stated that more than one half-million jobs, in 2015, were created through the support of HUD investments.
The report added that building 100 affordable rental houses can create as much as $12 million in income locally, including $2 million in taxes and other governmental funding. Moreover, the initiative can create 160 jobs during the first year. However, the report also revealed that funding for community development and housing initiatives, when adjusted for inflation, was approximately 8.5% lower in 2016 than it was in 2010. Therefore, lawmakers and agencies are sticking their head in the sand when it comes to the economic feasibility of providing affordable housing.
Affordable housing projects often provide more than just economic advantages. Ample green space and stable house values invigorate a community. The resulting ripple effect is both beneficial socially and financially.
In addition, the quality of the homes, maintenance, and management also must be a part of providing affordable homes. Housing, regardless of the cost, which is poorly managed or not continually maintained, will not benefit a community commercially and economically.
Therefore, affordable housing does make economic sense, as long as you follow up and ensure it will be maintained and managed properly. Only then will people realize the cost savings and benefits of providing homes for lower income people.
To benefit socially and financially, the government needs to take responsibility for the costs that result from homelessness. To ensure a better tomorrow, communities must see the advantages of making homes affordable and not exclusive. Doing so will cut down on crime, mental illness, drug abuse, and the costs associated with hospitalization and incarceration.