Affordable housing for the workforce is a significant crisis. There are a lot of challenges encountered by the crew when it comes to accessing affordable housing. The rising rates have put a more substantial gap in incomes and housing rates, resulting in extreme financial stress for the working class. Even investors face further challenges while bridging the rising gap.
Studies show that people who grew up in communities with high opportunities have greater chances of beneficial economic results. Areas with strong labor markets and reputable schools are higher in demand. But these areas do not have enough housing which plays a significant role in affecting the affordability rate. Housing near transit centers and jobs has become expensive, pushing the workforce to opt for affordable housing in the outskirts of urban localities, making no difference as they spend a lot of money and time commuting.
- Align housing policies can help meet the challenges- how?
Affordable housing for the workforce can be a reality if policy tools are aligned better. It includes land reformation, increased taxes for underused and expensive land, and expansion of subsidies on housing for the workforce.
- Reformation in Zoning
Maxwell Drever emphasizes investments need to be made towards average housing and less towards expensive housing, specifically in communities with high opportunities. To achieve so, the removal of regulatory barriers becomes imperative. These regulations restrict the market’s capacity to put affordable homes on land with increased opportunities for the workforce. Redeveloping houses can also improve affordability with compact housing designs.
With zoning reforms in affluent areas, the development of duplexes, apartment buildings, and townhomes can considerably improve the housing supply while further helping communities become accessible to a larger workforce.
- Improvements in tax on land value
Fewer regulation barriers would benefit investors while developing affordable housing for the workforce, leading to more significant opportunities in expensive localities in the long run. The conversion would be much more efficient and equitable if the initiative combined with increased taxes levied on land. What can be changed is that instead of the same rates set on both land and property, taxes should be charged higher on the ground and lower on the property, which will persuade luxurious landowners to build properties on a larger scale.
- Increased housing subsidies
Creating affordable housing for the workforce will reduce housing costs, primarily focusing on smaller housing. However, expansion of the market-rate housing supply is likely not enough for the working class on a larger scale. For most of the workforce, an effective way to help close the gap is through housing subsidies.
Execution and Challenges
The economic initiatives involving reformation in zoning, taxes on land value, and higher housing subsidies are direct, but the execution of such measures poses challenges for investors and the government. But improvements in housing policy can potentially benefit housing markets’ competence and offer financial relief to the working class. It portrays a practical challenge to achieve considerable payoffs for the workforce and helps tackle significant issues faced by investors, says Maxwell Drever.
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