Affordable Housing Proves to be Engine for Local Economic Improvement in NYC
New York--The economic benefits of affordable housing, beyond the provision of much-needed low-cost apartment residences, is threefold.
New York–For most, when the subject of affordable housing projects arises, the words “economic stimulus” rarely come to mind, but they should, according to Enterprise Community Partners and the Local Initiatives Support Corp. (LISC). The two organizations have just released a report on a commissioned study of low-income multifamily developments in New York City, indicating that affordable housing drives economic gains not only for property residents, but for the neighboring communities as well.
As per the report–based on data analysis provided by the Furman Center for Real Estate and Urban Policy at New York University and independent consultants–the economic benefits of affordable housing, beyond the provision of much-needed low-cost apartment residences, is threefold. The study, which involved an aggregate 660 new and redeveloped properties financed through Low-Income Housing Tax Credits (LIHTC), concludes that affordable housing promotes family financial stability, allowing households to more than double their discretionary income, which makes funds available for such concerns as healthcare, debt repayment and savings. Additionally, the study found that affordable housing also increases business for local merchants, as lower rent obligations allow area residents to live within their means and spend more discretionary income on services.
And, perhaps most surprising, LIHTC-funded affordable housing enhances local property values and helps boost property tax revenue. Real estate located near the properties that were analyzed immediately increased in value by 6 percentage points, and the figure continued to rise as time progressed. The main key is quite simple: appearance. “Because LIHTC-financed projects are so well designed and well built, it increases the values of surrounding properties,” Abby Jo Sigal, vice president and New York City Office director with Enterprise, tells MHN. The notion runs contrary to commonly held perceptions about government-funded multi-family developments.
“We’re dealing with a legacy issue surrounding affordable housing,” she notes. “Decades ago, most affordable housing projects didn’t involve private developers, but now, with LIHTC, there are public-private partnerships developing properties and there’s been much more emphasis on design and quality, especially over the last ten years. It’s very different from what was done with the U.S. Department of Housing and Urban Development in the 1970s.” The architectural community, adds Sigal, is becoming increasingly devoted to “giving back” by getting involved with the design of affordable housing.
While the study covered New York City properties only, Sigal believes the concept of affordable housing serving as an economic stimulus would be the same in various metropolitan areas nationwide. “The numbers would vary from city to city, but particularly in high-cost cities where families are paying closer to 50 percent of their income for rent, affordable housing gives more financial stability,” she says. “We hope more developers will find that building tax credit projects and building non-assisted projects in neighborhoods can be successful, and encourage mixed-income residential developments and additional services, which will bring vitality to neighborhoods. Housing is the underpinning to a neighborhood’s success.”