Affordable Housing and Job Creation

Building affordable housing not only creates jobs in the construction sector, but also stimulates the local economy in less obvious but substantial ways.

According to an article called The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development from the Center for Housing Policy, the development of affordable housing increases employment and spending in the local community, is an important source of revenue for local governments, and reduces the likelihood of foreclosure and the costs that are associated with it.

It’s not surprising to learn that the building of affordable housing creates jobs in the construction field and therefore supports businesses that supply the construction trade. But in addition, affordable housing further stimulates the economy when the workers spend their pay at the local retailers, health services, and restaurants. According to the article, the National Association of Home Builders (NAHB) estimates that building 100 new Low-Income Housing Tax Credit units can lead to the creation of more than 120 jobs during the construction phase. After the units are built, the residents continue to support about 30 jobs.

Local governments can also benefit from building affordable housing. Revenues from affordable housing include fees for permitting, zoning, utilities, as well as sales, income, or property taxes. NAHB estimates that 100 of the units when occupied by families generate $827,000 in local revenue immediately.

When families live in housing they can afford they will have more money to spend in the local community. Local business can receive benefits from the increase in the purchasing power of these families. Affordable housing that is also energy efficient will reduce the utility costs for the families, leaving them with even more money to purchase goods from local businesses. Additionally, builders of energy efficient homes stimulate the local economy by buying from local suppliers in order to reduce cost to the environment through transporting materials.

Affordable lending programs save the government money by reducing the chance for foreclosure. A study found that borrowers who received subprime loans were three to five times more likely to default on their mortgage than those who received prime loans through affordable lending programs. Local governments absorb many of the costs of foreclosures including boarding the property, trash removal, court and legal expenses, increased police and social services for the affected area, and demolition of severely distressed properties.

Increasing the support for affordable housing can be a way to create more jobs in North Carolina, but it can also stimulate local economies.

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