Affordable Housing: A Catalyst for Community Revitalization

Get More CRE
Investing Insights
Right to Your
Inbox

Affordable Housing: A Catalyst for Community Revitalization

Amidst the pressing challenges faced by communities across the United States, the dire need for affordable housing stands out as an urgent and pivotal issue. According to the National Low Income Housing Coalition, there is a shortage of 7 million affordable and available rental homes for extremely low-income households. This shortage can snowball into much larger, negative consequences, including homelessness, overcrowding, and substandard housing.

Affordable Housing: A Catalyst for Community Revitalization

Affordable housing multifamily complexes can help to address this shortage and revitalize communities. These complexes provide safe, affordable housing for low-income families and individuals. They also create jobs, boost the local economy, and improve the quality of life for everyone in the community.

How does affordable housing revitalize communities?

There are a number of ways that affordable housing can revitalize communities. These include:

 

  • Creating jobs: The construction and operation of affordable housing complexes create jobs in a variety of industries, including construction, maintenance, and property management. These jobs provide a much-needed boost to the local economy, especially in areas that are struggling economically.
  • Boosting the local economy: In addition to the direct jobs created by the construction and operation of affordable housing complexes, there are also indirect jobs created in the surrounding community. The residents of affordable housing complexes will need to buy food, clothing, and other goods and services. This will create jobs in the retail and service sectors and can lead to increased tax revenue and economic growth.
  • Improving the quality of life: Affordable housing complexes provide safe, affordable housing for low-income families and individuals. This can improve their health, education, and employment opportunities.
  • Reducing crime: Affordable housing complexes can help to reduce crime in the community. This is because they provide a stable environment for families and individuals, and they reduce the number of people who are homeless or living in substandard housing.

Statistics on the impact of affordable housing multifamily complexes

There are a number of statistics that demonstrate the positive impact of affordable housing complexes. For example, a study by the Stanford Graduate School of Business found that affordable housing complexes can increase surrounding property values by 6.5%. Another study found that transforming vacant lots can reduce violent crime by up to 29%, according to the Brookings Institute.

Affordable Housing: A Catalyst for Community Revitalization

A study prepared in 2009 for The Housing Alliance of Pennsylvania found that each $10 million of expenditures for affordable housing led to:

  • New multifamily construction – 148 jobs
  • Remodel/rehabilitation (preservation) – 200 jobs
Affordable Housing: A Catalyst for Community Revitalization

Moreover, a study by the Urban Institute found that every $1 invested in affordable housing generates $3 in economic activity. While many fear that affordable housing would actually increase crime, this idea has been debunked and in fact countered by a reduction in crime demonstrated in a study by UC Irvine.

Houston and Dallas

The lack of affordable housing in Houston and Dallas has become a pressing issue for many residents, particularly those with lower incomes. In Dallas, the situation is dire, with city data revealing a substantial scarcity of housing units for households earning below 80% of the area median income, with a staggering shortage of 85,000 units. This deficit increases to a staggering 186,000 units for those with incomes below 50% of the AMI, as reported by the National Low Income Housing Coalition. The problem is further compounded by the fact that there are fewer than 12,000 units currently supported by housing programs in production in Dallas, leaving countless individuals struggling to secure affordable housing options.

Affordable Housing: A Catalyst for Community Revitalization

Similarly, Houston faces an equally severe shortage of affordable housing. According to the National Low Income Housing Coalition, there are only 19 affordable housing units available for every 100 households in need, leaving many vulnerable communities grappling with the challenges of skyrocketing housing costs. For those in low-income brackets, the dream of owning or even renting a home seems increasingly distant and unattainable.

 

However, there is still hope for addressing this crisis. In Dallas, city officials are taking proactive steps to combat the soaring cost of housing. The City Council Housing Committee has proposed an ambitious plan to allocate up to $400 million in public funds to attract and develop affordable housing projects. Notably, the 2024 public improvement bond referendum could include a substantial $150 million earmarked specifically for housing initiatives, representing a remarkable increase in affordable housing support compared to past Dallas bond referendums. These efforts demonstrate a commitment to finding sustainable solutions and offering a glimmer of hope for those in need of affordable housing in both Houston and Dallas.

Case Study

Houston’s approach to addressing homelessness has been nothing short of transformative, achieving an impressive 68% reduction in homelessness since 2011 through a data-driven and innovative strategy. Central to this success is the city’s adoption of a Housing First approach, initially piloted to target homeless veterans before being extended to encompass the broader chronically homeless population. This shift in focus prioritizes providing housing as the first and foremost intervention for those experiencing homelessness, recognizing that stable housing is the foundation for addressing other challenges individuals may face.

 

Amid the additional hardships brought on by the COVID-19 pandemic, Houston displayed unwavering commitment by collaborating with regional partners to launch the Community-wide COVID-19 Housing Program (CCHP). In Phase One, an investment of $65 million was allocated to house 5,000 individuals over two years, showcasing the city’s dedication to providing secure and stable housing options for vulnerable populations. Building on the program’s success, Houston unveiled Phase Two in January 2022, allocating an impressive $100 million to house an additional 7,000 individuals. Houston’s experience presents an inspiring and practical case study for other communities seeking to combat homelessness with data-driven and innovative solutions.

Affordable Housing: A Catalyst for Community Revitalization

Conclusion

The future of affordable housing initiatives holds great promise for both its residents and the nation as a whole. As the population continues to grow and urban areas become increasingly expensive, it is crucial that the country remains committed to addressing the affordable housing crisis. By investing in innovative solutions and partnerships, such as public-private collaborations and non-profit organizations, the U.S. can ensure that its citizens have access to safe, decent, and affordable housing options.

 

Moreover, affordable housing not only benefits individuals and families by providing stable homes but also has positive effects on communities. It fosters social cohesion, reduces homelessness rates, and promotes economic growth. Prioritizing affordable housing initiatives now can create a more equitable society that offers opportunities for all its residents. However, it is important for policymakers to acknowledge the challenges that lie ahead and actively work towards overcoming them.

Get More CRE
Investing Insights
Right to Your
Inbox

About Us

MarketSpace Capital, LLC is a Houston, Texas-based private equity real estate development firm focused on ground up developments and value-add investments throughout the United States.

Contact Us

Find Us

Headquarters

9100 Southwest Freeway, Suite 201 Houston, Texas 77074

Disclaimer: The information presented in this report, blog, or article is intended for informational purposes only and should not be interpreted as an invitation or solicitation to buy or sell securities or to engage in any investment or decision-making process. This communication serves as educational content and not as financial advice.