- April 25, 2017
- Posted by: tjmuro
- Category: Commercial Construction Development, Multifamily Affordable Housing
The latest report by Housing Spotlight has revealed critical findings about the affordable housing growth in the United States. The report has also examined the gaps between demand and supply for affordable housing development and low-income housing units, both at the national and state level. The Report “Affordable Housing is Nowhere to be Found for Millions”, demonstrates the detailed analysis of the housing needs of low-income people across the United States. The report mentions the Availability of just 31 affordable rental units for every 100 low-income households looking for affordable housing. Many factors have been highlighted in the report that is attributed to this issue, along with calling for a government’s intervention at the local, federal and state level to reduce this gap.
Every year, the National Low Income Housing Coalition (NLIHC) analyzes the availability of the affordable rental housing to low-income families and other income groups defined by the HUD. This annual examination persistently shows a significant shortage of low-income housing units to these households.
The Report Highlights
According to the report “The GAP: The Affordable Housing GAP Analysis 2016”, there is a shortage of around 7 million affordable rental housing units to low-income households. There are just 31 such units available per 100 low-income renters. For around 4 million deeply low-income people, i.e. having income less than or equal to 15 percent of Area Median Income (AMI), there is a need of 3.4 million affordable and available housing and to ensure enough multifamily affordable lending opportunities. The report reveals that there are just 17 such units available per 100 of these households.
The Growing Need for Affordable Housing
The affordable housing shortage is affecting the quality of life for many low-income and deeply low income families. According to the mentioned report, 75 percent of the low income households while 93 percent of deeply low-income people are severally expense-burdened, compelled to spend more than 50 percent of their income as their rent and on utilities.
In every state, on average, minimum 55 percent of the low-income families spend as much as half of their monthly income against rental cost.
Another Report, “A place to Call Home”, issued by the Campaign for Housing and Community Development Funding (CHCDF) reveals how access to low income or affordable housing development reduces homelessness and poverty, enhances economic mobility, strengthens overall economy and positively affects health outcomes. The report showed that HUD housing and community development funding was just $4.3 billion in 2016, i.e. 8.4 percent lower than that in 2010, due to inflation. According to reports estimate, building 100 affordable housing units results in $11 million increase in local income, $2 million in taxes and other revenues received by local governments, and around 160 local jobs, all in the first year alone.
The United for Homes Campaign, led by NLIHC calls for rebalancing a federal housing budget for making investment in affordable housing projects. The campaign also calls for the amendments in mortgage interest deduction to help millions of lower income families to generate billions of dollars in savings for investing in affordable or low income multifamily lending programs.
The Opportunity for developers
The growing need for affordable housing in the United States brings a lot of untapped business opportunities for the private sector developers, looking for lucrative and long term building and housing projects with handsome ROI and consistently higher profit margins. In addition, financial consultation and solutions providers that have a platform for providing affordable housing initiatives addressing equity, debt and permanent financing solutions, can also expect an expanding and profitable market in the United States in the coming years.