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Benefits of Affordable Housing

Click here to read New Mexico Governor Michelle Lujan Grisham's proclamation on Affordable Housing Month.

 

Top five myths about affordable housing:

  1. Affordable housing increases crime
    • There is no direct data to suggest that the presence of an affordable housing development increases crime in the neighborhood in which it is located.
  2. Affordable housing will decrease home values
    • This is a nuanced myth. Research shows that the presence of an affordable housing development in a neighborhood with predominately low-income households can raise home prices in that neighborhood by 6.5 percent. At the same time, the presence of an affordable housing development in a neighborhood with predominately higher incomes can lower home values by 2 percent.
  3. Affordable housing is unattractive
    • Affordable housing developments have evolved in-line with the design and quality standards of the times. Chances are, you live near a beautiful affordable housing development and don’t even know it.
  4. Affordable housing increases drug prevalence
    • There is no data to support this claim. To the contrary, research indicates that unstable housing can lead to “stress which triggers substance misuse and relapse” among individuals recovering from substance abuse. Access to affordable housing allows these individuals to live in a safe, stable environment, reducing the chance of relapse.[ii]
  5. Affordable housing incentivizes government dependency
    • Access to affordable housing allows cost-burdened individuals and families to spend less of their household income on rent and utilities. As a result, these individuals and families can spend more on other necessities, including transportation, education and healthcare. Access to these necessities can increase upward economic mobility and allow individuals and families to become more self-sufficient and financially secure.

 

Five ways communities benefit from affordable housing:

  1. Affordable housing increases home values in traditionally underserved neighborhoods
    • Researchers at the Stanford Graduate School of Business found that affordable housing construction in neighborhoods with predominately low-income households increased nearby property values by approximately 6.5 percent.[iii]
  2. Affordable housing decreases homelessness
    • Affordable housing comes in many forms, including traditional income-restricted units, housing vouchers, and rapid rehousing assistance. Each of these programs helps decrease homelessness. In 2019, nearly 300 individuals in Albuquerque transitioned from homelessness to permanent housing through the assistance of a rental subsidy.[iv]
  3. Affordable housing improves quality of life for older individuals.
    • Approximately 37 percent of U.S. adults over the age of 80 spend more than 30 percent of their income on housing costs. Close to 30 percent of U.S. renters over the age of 65 spend more than 50 percent of their income on housing costs. Affordable housing helps lower housing costs, allowing renters to allocate more income toward health, food and other important necessities which improve quality of life.[v]
  4. Affordable housing reduces recidivism rates
    • Formerly incarcerated individuals are less likely to reincarcerate if they have access to safe, quality affordable housing. Research from the Returning Home Ohio Pilot Project found that formerly incarcerated individuals who gained access to affordable housing and related services were “40 percent less likely to be rearrested.”[vi] Often, formerly incarcerated individuals face housing discrimination leading to homelessness, which can lead to reincarceration.
  5. Affordable housing decreases reliance on public services
    • Access to affordable housing allows cost-burdened individuals and families to spend less of their household income on rent and utilities. As a result, these individuals and families are able to spend more on other necessities, including transportation, education and healthcare. Subsequently, access to these necessities can increase upward economic mobility and allow individuals and families to become more self-sufficient and financially secure.

 

Five ways families benefit from affordable housing:

  1. Affordable housing reduces childhood poverty
    • Research shows households that contribute more than half of their monthly income toward housing costs are left with an average of $565 per month for all other expenses. Affordable housing decreases childhood poverty by allowing families to spend more of their income on other necessities.[vii]
  2. Affordable housing improves educational performance in children
    • Research shows that access to safe, quality affordable housing provides children with a foundation that is shown to increase for educational success.[viii] According to a Harvard study, children who moved to lower poverty neighborhoods before the age of 13 experienced a 31 percent increase in adult earnings.[ix]
  3. Affordable housing decreases food insecurity
    • According to the National Low Income Housing Coalition, renters who spend 30 percent or more of their income on housing and utility costs are considered cost burdened. Renters who spend more than 50 percent are considered severely cost burdened. Affordable housing lowers the housing cost burden, allowing families to spend more on other necessities, including food.[x]
  4. Affordable housing improves mental health
    • Research shows that access to affordable housing can reduce “psychological distress, as well as post-traumatic stress disorder, among formerly homeless families.”[xi]
  5. Affordable housing increases economic mobility
    •  Access to affordable provides individuals and families the opportunity to achieve upward economic mobility. According to the Center on Budget and Policy Priorities, in 2021, affordable housing programs lifted approximately four million Americans out of poverty.[xii]

 

Five ways affordable housing can boost local economies:

  1. Affordable housing increases discretionary funding
    • Individuals and families who spend more than 30 percent of their income on housing costs are considered cost burdened. Those who spend more than 50 percent of their income on housing costs are considered severely cost burdened. Lower housing costs allow consumers to increase discretionary spending which can boost local economies.
  2. Affordable housing construction creates jobs
    • Research shows that the construction of 100 affordable rental homes creates 161 jobs and supports local businesses through construction materials are purchased. In 2015 alone, affordable housing funding supported 2,344 jobs in New Mexico.[xiii]
  3. Affordable housing increases local tax revenue
    • A recent study found that constructing 100 affordable rental homes generates $2.2 million in taxes and related revenue for local governments.[xiv]
  4. Affordable housing increases overall health in traditionally underserved neighborhoods
    • Constructing multi-family affordable housing developments in traditionally underserved neighborhoods allows individuals and families to secure quality affordable housing that is free from many environmental hazards that can found in similarly priced housing, including lead paint, contaminated water and asbestos.[xv]
  5. Affordable housing benefits local infrastructure
    • The construction of affordable housing developments generates considerable tax revenue, which is then reinvested back into the community in the form infrastructure including roads, public spaces and public transportation.

 


Rebecca Diamond and Tim McQuade, “Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development,” Journal of Political Economy 127, no. 3 (2019): pp. 1063-1117, https://doi.org/10.1086/701354.

[ii] Rajita Sinha, “Chronic Stress, Drug Use, and Vulnerability to Addiction,” Annals of the New York Academy of Sciences, (July 2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2732004/.

[iii] Rebecca Diamond and Tim McQuade, “Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development,” Journal of Political Economy 127, no. 3 (2019): pp. 1063-1117, https://doi.org/10.1086/701354.

[iv] Josh Leopold et al., “Albuquerque Affordable Housing and Homelessness Needs Assessment” (Urban Institute, May 2020), https://www.urban.org/sites/default/files/publication/102261/albuquerque-affordable-housing-and-homelessness-needs-assessment_2.pdf, 17.

[v] Marcia Fernald, ed., “Housing America's Older Adults: Meeting the Needs of an Aging Population” (Cambridge, MA: President and Fellows of Harvard College, 2014), pp. 1-40, 3

[vi] Gabriella Velasco, “Can Housing Interventions Reduce Incarceration and Recidivism?,” Housing Matters, November 11, 2019, https://housingmatters.urban.org/articles/can-housing-interventions-reduce-incarceration-and-recidivism.

[vii] “Impact of Affordable Housing on Families and Communities: A Review of the Evidence Base” (Enterprise Community Partners, 2014), https://homeforallsmc.org/wp-content/uploads/2017/05/Impact-of-Affordable-Housing-on-Families-and-Communities.pdf, 4.

[viii] Maya Brennan, Patrick Reed, and Lisa A. Sturtevant, “The Impacts of Affordable Housing on Education: A Research Summary” (Center for Housing Policy, November 2014), https://nhc.org/wp-content/uploads/2017/03/The-Impacts-of-Affordable-Housing-on-Education-1.pdf.

[ix] Elayne Weiss and Natalie Brown, “A Place to Call Home: The Case for Increased Federal Investments in Affordable Housing” (Campaign for Housing and Community Development Funding C/O National Low Income Housing Coalition, 2005), https://nlihc.org/sites/default/files/A-Place-To-Call-Home.pdf, 5.

[x] “Housing Needs by State: New Mexico,” National Low Income Housing Coalition, accessed April 22, 2021, https://nlihc.org/housing-needs-by-state/new-mexico.

[xi] Elayne Weiss and Natalie Brown, “A Place to Call Home: The Case for Increased Federal Investments in Affordable Housing” (Campaign for Housing and Community Development Funding C/O National Low Income Housing Coalition, 2005), https://nlihc.org/sites/default/files/A-Place-To-Call-Home.pdf, 7.

[xii] “Affordable Housing Enables Moving to Opportunity,” Opportunity Starts at Home (Opportunity Starts at Home), accessed April 29, 2021, https://www.opportunityhome.org/resources/affordable-housing-enables-moving-opportunity/.

[xiii] Elayne Weiss and Natalie Brown, “A Place to Call Home: The Case for Increased Federal Investments in Affordable Housing” (Campaign for Housing and Community Development Funding C/O National Low Income Housing Coalition, 2005), https://nlihc.org/sites/default/files/A-Place-To-Call-Home.pdf, 10.

[xiv] Elayne Weiss and Natalie Brown, “A Place to Call Home: The Case for Increased Federal Investments in Affordable Housing” (Campaign for Housing and Community Development Funding C/O National Low Income Housing Coalition, 2005), https://nlihc.org/sites/default/files/A-Place-To-Call-Home.pdf, 10-12.

[xv] Dolan, Author: Chelsea. “6 Ways Affordable Housing Can Boost Local Economies.” CommonBond Communities, March 23, 2021. https://commonbond.org/economic-benefits-of-affordable-housing/.