With the US economy showing a downward trend for a long time and home rentals increasing steadily, most people in the US face challenges in finding affordable housing. Even people working two jobs still find it difficult to pay the rent on time or rent a home that they really like.
With the increasing scarcity of affordable housing, it’s possible to ask how it affects property values. The key to understanding this is identifying the specific conditions that stabilize or destabilize neighboring property values. Below are three reasons how affordable housing affects property values.
Higher appreciation rates
Affordable houses or apartments will likely attract many target customers from different parts of the country. Suppose the number of apartments in the area is so high. In that case, there is the likelihood that the population of the entire region is likely to increase, and there will be stiff competition for the properties in the area.
Affordable housing generates more positive impacts on the properties within the surroundings, which is why it forms part of the revitalization program for the neighborhood. The higher the competition for the properties, the higher the appreciation rates for the property values.
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When new affordable houses are built, they replace depressed conditions like abandoned properties, vacant apartments or other blighted conditions that add less value to society. This generates a more positive impact on the properties within the surroundings than the other properties that are developed away from the affordable houses.
Many revitalization programs are developed to ensure that the services within the neighborhood meet the customers’ demands. The value of the products offered in the area also increases as the real estate businesses strive to meet the tastes and preferences of the customers. One common revitalization program is the frequent renovation of the buildings that are within the area.
More innovative building designs come up as the real estate developers in the neighborhood try to compete for the target customers within the area. Financial institutions like banks and health centers have started adopting new tools to support the new customer base. And this has an overall effect on every property that is in the neighborhood.
Good management for long-lasting service
How long a property will remain in good condition depends on its construction quality and regular management. When properties are well-managed, they tend to maintain their value for an extended period. Good property management is what makes the difference in affordable housing.
This implies that the customer concerns are well taken care of whenever the management raises, and the property’s value is highly safeguarded. Most housing companies will do everything possible to make sure that they maintain the unique features that are highly appreciated by the community.
When a property is well-maintained, this determines the level of subsidization for the target customers. The higher the quality of the property, the higher the subsidization rates for the tenants who work in various government offices and other organizations.
How to support affordable housing
The government should directly offer discounted housing to low-income families. Families receiving the discounted house can now afford to pay the rent. Remember that some families receive more money and can now afford a wide range of discounted government housing programs.
Policymakers should also increase the number of apartments in a given metropolitan area. This can be achieved by relaxing restrictions on the size of the apartments that builders can build. Most cities tend to have several zoning rules that dictate housing supply.
The government can also engage the big tech companies to overcome the challenges of the housing crisis. Recently, the number of tech companies investing in housing projects has risen. They are striving to offer affordable housing to their workers and the members of the community.
Economic benefits of the affordable housing
Most cities that have failed to provide affordable housing solutions often drive out potential residents and workers, discouraging the local industries’ economic growth. More money is spent in the local communities when there is affordable housing. Rent is one of the biggest and most vital expenses members of the community pay often.
When the prices of the rent rise and their salaries remain stagnant, then there is the likelihood that they are likely to spend money meant for the investment on paying rent. With affordable housing, there will also be very few evictions. The threat of evictions high affects workers who get paid minimal wages.
Healthier populations will mean a healthier economy, which can only be achieved with affordable housing. A house is a vital social determinant of the health of the community members.