Housing is the cornerstone of our society. When Americans have access to quality, affordable, and sustainable homes, communities thrive. Similarly, many of our nation’s most pressing social, economic, and public health challenges are driven, at least in part, by a shortage of affordable homes. Homelessness, economic inequality, and climate change are all connected to our nation’s increasingly high cost of housing. In the last couple of years, these challenges have only grown more pressing, underscoring the acute need for affordable housing, now.
Yet, when it comes to conversations about housing policy, there is perhaps no term more deeply misunderstood than affordable housing.
Misconceptions about the residents who live in affordable housing, communities that benefit from it, and entities entrusted with building it permeate much of the national discourse on the subject. Affordable housing is defined more by its misperceptions than its impact—and that must change.
This dynamic illuminates a fundamental truth that our industry must address: Ending the affordable housing crisis will take more than just building. It will also require a concerted effort to educate those who are not aware of the deep impact that affordable housing has for so many, across different backgrounds, income brackets, and communities throughout the U.S.
Challenging existing misunderstandings begins with reframing the narrative about how individuals, communities, and ultimately our society benefit from affordable homes.
Affordable Housing Benefits Communities
The vast majority of Americans, across a range of incomes, are in need of affordable housing. The last two years have been particularly challenging for renters. A recent report from Harvard University explains that “renters in general, and lowest-income renters in particular, have taken the brunt of the economic fallout from the pandemic,” adding that “more than half of all renter households had lost income between March 2020 and March 2021.”
Whether it’s a firefighter or a teacher seeking to live in the neighborhood they serve, a formerly unhoused person getting back on their feet, or a retired senior couple living on a fixed income, hardworking Americans need access to the stability and opportunity that affordable homes provide. Residents who live in affordable properties are integral members of our communities who collectively contribute to keeping our economy functioning. Affordable housing plays a significant part in allowing them to continue to support their families and communities.
America’s diversity is also reflected in affordable housing, which provides homes for families across the socioeconomic spectrum. Many housing developments offer units tailored to the needs of families at varying income levels, from those earning 40% to 60% of their area’s median income to others in need of workforce housing, typically earning 80% to 120% of their area’s median income. The impact of these affordable units goes beyond individuals and families; it compounds throughout communities, enriching and improving life for all Americans.
Misleading claims about affordable housing abound—from negative stereotypes about the residents of these properties to allegations that it automatically makes neighborhoods less safe or beautiful. The reality is very different.
When communities have an abundance of affordable homes, everybody stands to gain. A wide body of research has found that affordable housing increases job creation and purchasing power, boosts local economies, reduces homelessness and crime, and even helps take cars off the road—limiting traffic, pollution, and carbon emissions. According to researchers at New York University, affordable housing properties may also help improve the value of surrounding homes.
Being Part of a Collaborative Solution
Expanding the nation’s affordable housing stock is key to all communities in America being able to share in these benefits. At Lincoln Avenue Capital, we recently acquired and rehabilitated a property in West Palm Beach, Florida, a city with limited affordable housing options for residents who have called it home for years. The 264-unit Malibu Bay Apartments provides quality homes that will remain affordable for decades, benefitting West Palm Beach families as well as the broader community.
Just as misperceptions exist in public opinion about who affordable housing is for and its impact on communities, so too exists a lack of clarity around the entities that create affordable homes. Many Americans wonder who should build and pay for new affordable homes. Should they be financed by government agencies? Private companies in the industry? Nonprofits?
The most effective way to build new affordable homes is often through partnerships that marshal the resources and expertise of public, private, and nonprofit stakeholders. Public-private partnerships and joint ventures combine regulatory access with capital, getting affordable homes built—and American families housed—at a much faster rate. Once properties are built or preserved, many developers, including our company, broker partnerships with local social service providers to offer critical on-site services to residents. Affordable housing is at its best when it is collaborative, integrative, and informed by local input.
The research is clear that we need to expand America’s affordable housing stock if we wish to address persistent policy challenges like climate change, public health, and homelessness. But there is often a disconnect between the perception of affordable housing and the reality we see everyday: that affordable housing strengthens families and communities.
For those of us who work in the industry, we know affordable housing can transform lives. When more Americans see it too, there’s no telling what potential for impact will be unlocked.
Eli Bronfman is a managing partner at Lincoln Avenue Capital. Read more of Eli Bronfman’s Thought Leadership here.