Affordable Housing and it's types, Benefits

Over the past few decades, housing affordability at the household level and the affordable housing stock more broadly have gradually declined for most low, very low, and extremely low-income renters and for some low-income homeowners in many countries, including Bangladesh. Affordable housing challenges may impact a household’s budget, leaving less to pay for food, utilities, transportation to work, health care expenditures and reducing savings for emergencies, retirement, and other opportunities.

Affordable Housing

Housing that is decent-quality and affordable generally defined as:

1. consuming less than 30% of a family’s income 
2. which enables families to better enjoy a variety of life outcomes, such as family stability, good health, employment, transportation, education, and recreation. 
3. Decent and affordable housing also contributes to the improved physical, economic, environmental, and social health the sustainability of communities. 

The World Bank defines affordable housing as housing that is adequate in quality, affordable in cost, and located in a suitable location. 

 

The United States Department of Housing and Urban Development (HUD) defines affordable housing as housing that costs no more than 30% of a household's gross income. 

Australian National Affordable Housing Summit Group, "reasonably adequate in standard and location for lower- or middle-income households and does not cost so much that a household is unlikely to be able to meet other basic needs on a sustainable basis." 

Though different countries have different definitions for affordable housing, but it is largely the same, i.e. affordable housing should address the housing needs of the lower or middle income households. 

Benefits of Affordable Housing:

Opportunities: Affordable housing buildings create several opportunities for economic growth while fostering a stable, healthy, and happy population. When individuals are safely housed, they can shift their focus from merely surviving to thriving. Having a fixed address, a safe place to call home and a sense of belonging within their community, individuals begin to set goals, reach milestones, and live their lives with purpose. 

Community: One of the most powerful misconceptions is that affordable housing damages communities. But affordable housing can create and strengthen communities by providing affordable homes to individuals and families, they can become part of a larger community and build relationships with their neighbors, fostering a sense of belonging and connection. Education & Employment: Of course, affordable housing also improves employment opportunities for the residents. When adult individuals are only paying 30% of income towards rent, they may have the opportunity to return to school and upgrade credentials, or complete certification courses which can result in more meaningful employment and increased confidence. 

Health & Essentials: By providing safe and stable living environments, affordable housing can reduce stress and anxiety, leading to better mental health outcomes. Additionally, affordable housing can help individuals and families access healthcare services, reducing the risk of chronic illnesses. 

Stability: Affordable housing provides stability for individuals and families, allowing them to plan for the future and invest in their long-term goals. By reducing housing insecurity and instability, affordable housing can also reduce the risk of homelessness and housing-related stress. 

Types of Affordable Housing: 

Social Rented Housing Social rented homes are owned by either local authorities or registered providers of affordable housing (RP's). These organisations charge a rent which is set by government guidelines through the national rent regime. Public housing buildings and complexes Many cities and towns have specific buildings and complexes for affordable housing that are supported by federal, state, and local funding. For example, many communities have local housing authorities that operate apartment buildings for low-income senior citizens. Scattered site affordable housing. These units can take different forms, including rental units, shared ownership, and self-build homes, and are typically subsidized by the government or non-profit organizations to keep rents or prices below the average market rate. Scattered site affordable housing allows families to choose where they want to live, giving them more control over their housing situation and reducing the concentration of poverty. However, the program can face challenges such as finding suitable housing units in different neighborhoods and community resistance to the placement of affordable housing units in some areas. 

Cheap Housing: Cheap housing may be low-cost due to various factors, such as being located in undesirable or unsafe areas, having inadequate facilities, or being poorly constructed. On the other hand, affordable housing is typically subsidized by the government or non-profit organizations to keep rents or prices below the average market rate, while still offering safe and adequate housing options to low-income families. 

Challenges in Providing Affordable Housing: 

Lack of funding: Providing affordable housing can be expensive, and funding for affordable housing is often limited. Governments may face budget constraints or competing priorities, and private developers may not see affordable housing as a profitable investment. 

High construction costs: Building new housing or renovating existing housing to make it affordable can be costly. This can include costs for land, materials, labor, and compliance with building codes and regulations. NIMBYism: Some communities may resist the development of affordable housing in their neighborhoods due to concerns about property values, increased traffic, or crime. This can make it difficult to site affordable housing in desirable locations. 

Inadequate zoning and land-use policies: Zoning and land-use policies can make it difficult to develop affordable housing in desirable locations, especially in areas with high property values or limited land available for development. 

Insufficient tenant protections: Renters may face eviction or displacement if they are unable to pay rent or if their landlord decides to sell the property or raise rents. Legal protections for renters can help prevent evictions and displacement. 

Political will: Providing affordable housing requires political will at the local, state, and national levels. Elected officials may be reluctant to invest in affordable housing if they do not see it as a priority or if they face opposition from constituents. 

Solutions for Providing Affordable Housing: 

Increase funding for affordable housing: Governments at all levels can increase funding for affordable housing through programs like the Low-Income Housing Tax Credit (LIHTC), Community Development Block Grants (CDBG), and HOME Investment Partnerships Program. 

Reduce construction costs: Governments can reduce construction costs by streamlining the regulatory approval process, providing tax incentives for developers who build affordable housing, and encouraging the use of innovative building techniques and materials. 

Promote inclusive zoning policies: Governments can promote inclusive zoning policies by requiring developers to include affordable units in new developments, rezoning underutilized or vacant land for affordable housing, and creating incentives for developers who build affordable housing. 

Protect tenants: Governments can protect tenants by enacting just-cause eviction protections, establishing rent control policies, and providing legal assistance to tenants who face eviction. 

Build political support: Building political support for affordable housing requires educating the public about the benefits of affordable housing, engaging community members in the development process, and building coalitions with other organizations that support affordable housing. 

Address root causes of poverty: Addressing the root causes of poverty, such as income inequality, lack of access to education and job training, and discrimination, can help reduce the need for affordable housing in the long term. 

Conclusion

Affordable housing is an important issue that affects many people. Providing affordable housing can be challenging, but there are potential solutions that can help make housing more affordable for low- and moderate-income households. By working together, we can help ensure that everyone has access to safe, stable, and affordable housing.