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5 Ways Whole Communities Can Benefit from Affordable Housing

March 14, 2024

Replacing Myth with Tangible Benefit

A house built out of puzzle pieces against a gray background.
By Karen Nemsick, Director, Housing Justice Initiative
There is the myth that affordable housing brings down the value of a neighborhood or doesn’t provide benefits to a community. Misconceptions about affordable housing developments are based on fear of negative stereotypes, property values, and the change it brings to neighborhoods—all of which are common arguments in opposition to a new housing community.

In fact, it’s the lack of affordable housing that can negatively impact a community. This housing shortage in major metropolitan areas costs the American economy about $2 trillion a year in lower wages and productivity.

High housing costs constrain opportunities for families to increase earnings, causing slower GDP growth. Researchers estimate the growth in GDP between 1964 and 2009 would have been 13.5% higher if families had better access to affordable housing. This would have led to a $1.7 trillion increase in total income, or $8,775 in additional wages per worker. Because the lack of affordable housing options is such a barrier, it also makes it difficult for businesses to attract and retain the workers they need.

Tangible Benefits of Affordable Housing in Communities

We’ve talked about the negative impacts of a lack of affordable housing options. Let’s now discuss the actual benefits these bring to communities that opt to be more inclusive.

Here are five ways affordable housing benefits communities:

  1. More money spent in locally

    Maybe the most obvious economic benefit of affordable housing is the increase in discretionary spending. For most people, rent or a mortgage is the biggest and most important expense each month. When income loss threatens a person or family’s ability to meet housing costs, the likelihood of spending money on anything other than the most basic needs ripples and harms the local economy.

    But when residents of affordable housing communities are not stretched as much to keep a roof over their heads, they’re able to spend more on purchases at local businesses— going beyond the bare necessities to choose healthier food options and have better access to healthcare.

  2. Fewer evictions

    Approximately 108 million Americans live in a rental home or apartment, and 25% of these renters spend more than 50% of their monthly income on rent. That means millions of people are one small, unexpected expense away from losing their housing. The sacrifices families were already making—medicine, childcare, groceries, education—just to make rent have only increased with the consumer price index hitting 7% in mid-2022.

    These repercussions will likely have long-lasting effects that impact multiple generations of a family.

    Evictions cause a cycle of instability for families which in turn harms a community’s social and economic well-being. That’s why stability is at the heart of affordable housing efforts—it works to prevent evictions no matter the economic climate. The social and economic return of keeping individuals and families housed is well worth the investment.

  3. Healthier populations

    Housing is a huge social determinant of health. Among other factors like income and education, housing is a component that drastically influences a person’s physical and mental well-being. Poverty severely limits people’s options to obtain medical care, which is why it is linked to a vast range of health problems, both acute and chronic.
    Most obvious is the quality of the housing itself. Low-income housing that is poorly constructed and/or maintained may expose families to lead paint and mold, contaminated water supplies, and a slew of other environmental threats that are far less likely among more affluent populations. These threats lead to chronic health issues for children, families, and seniors, which come at enormous and preventable costs to both residents and their greater communities.

    The buildings themselves are not the only risks. When people spend most of their income on housing, other critical needs that contribute to health like healthy foods and doctor visits fall by the wayside. But when people have access to quality affordable housing options, they are far less likely to face environmental threats, and far more likely to have enough income for healthier food options and routine medical care—ultimately helping them lower the risk of severe health problems. The more people can spend on adequate healthcare and fresh food, the better and healthier the local economy becomes.

  4. More job opportunities

    Another huge economic impact of increased affordable housing production is the number of jobs it can create, both during the construction phases and ultimately through long-term societal growth. Consider what goes into building new affordable housing: developers need to hire architects and construction companies to build, and then housing developments will need property staff for maintenance, operations, and leasing to keep the grounds well-managed and clean for the residents it needs to attract and retain.

    The healthier an economy is, the more jobs it will need. One of the long-term opportunity benefits of affordable housing is that it encourages improved mobility that ultimately creates more jobs (and growth!) for our cities. Though some of these jobs are more immediate than others, the long-term benefits of affordable housing are profound and can lead to meaningful change in society.

  5. Investing in Children

    Another long-term economic benefit of affordable housing is the chance to decrease childhood poverty. When children don’t have consistent, safe, and stable housing, they are less likely to succeed in school. Providing children with a more equitable path forward by keeping them housed in mixed-income communities is one of the ways to stimulate economic growth and cultivate healthier societies. This isn’t just a moral argument — it’s been proven that equipping children with tools for social mobility creates economic growth for communities. According to Mark Rank, a Professor of Social Welfare at Washington University, “It is estimated that for every dollar spent on reducing childhood poverty, the country would save at least $7 with respect to the economic costs of poverty.”

Ensuring that Bay Area individuals and families have access to safe, quality, and affordable housing is central to our Housing Justice Initiative at UWBA. If we want the communities across our region to thrive, we must provide solid opportunities for our neighbors to live within them, and to do so in a manner that is healthy and with dignity.

When you contribute to UWBA, you are helping us and our community partners to do this work – please consider donating today. You can also learn more about our Housing Justice work on our website and if you would like to stay up to date on our efforts, please subscribe to our Housing Justice Newsletter.