How affordable housing can boost property values
Building affordable housing with federal tax credits in low-income, high-minority communities can raise property values, lower crime rates and lead to greater racial and income integration, according to research from Stanford University.
Developers who build high-quality new housing can make an area more attractive to prospective residents who, in turn, could bring greater wealth to the community, according to The Washington Post.
In neighborhoods with a median annual income of less than $26,000, home values rose 6.5% within a tenth of a mile of a new affordable housing complex. Neighborhoods with median incomes of $54,000 or more, however, saw home values depreciate by 2.5% within the same distance.
Cities and states across the country continue to scramble to address the widening gap between the supply of affordable units and demand for them. In the U.S. and Canada, nine in 10 people say their countries need a solution to the lag in affordable housing, while 75% say the issue hasn't received the attention it requires, according to a PSB survey in conjunction with Habitat for Humanity. What's more, 84% of those surveyed in the U.S. say high housing costs are the largest barrier to homeownership and 69% say the federal government is not doing enough to improve access to affordable housing.
Already high – and rising – housing costs will remain a hurdle for those aiming to make the leap into homeownership, particularly as starter and trade-up home inventory continues to slide. The U.S. median home price rose 6.8% in May to $288,000, while the for-sale home supply reached its lowest level since 2010 at 2.7 months, according to Redfin.
State and municipal governments are making moves to bring more affordable housing online. In Chicago, the city's Housing Authority approved two construction loans, each up to $11 million, for projects that would couple affordable housing with public libraries. In May, New York Gov. Andrew Cuomo revealed a $20 billion, five-year plan to expand affordable housing options in the state, making it the largest investment in such an effort in state history. It will put $10 billion toward building and maintaining more than 110,000 affordable units, including some produced through Cuomo’s Affordable New York tax incentive program.
In California, where housing inventory is among the tightest in the nation, state senators recently passed a host of bills to ease the housing crisis, among them a $3 billion affordable housing bond. The series of legislation also includes Senate Bill 35, which streamlines the permitting process for multifamily projects in high-density areas that aren't keeping pace with their housing development needs. The state Assembly is now considering the legislation. A recent tax on some real estate transactions was also approved and now awaits consideration in the Assembly.
Meanwhile, Congress, per The Post, is trying to pass a bill that would prevent states from using NIMBY (Not In My Backyard) opposition as a means of blocking new affordable housing developments. That legislation, according to one University of Chicago professor, would encourage more such developments in higher-income, predominantly white communities.
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