Affordable housing plays a substantial role in Dover’s economic development. Employers, like myself, throughout the seacoast have had a difficult time finding and keeping employees. It is just too expensive for many people to relocate here. For many, housing costs eat up more than 50% of their monthly wages. That leaves little, is any, expendable income to spend in the local economy.

Thanks to affordable housing, more opportunities can become available for people at all income levels, more money is available for investing in the community, and long-term change can begin to take root. It benefits families and drives the local economy.

Affordable housing developments support job creation and retention. According to the National Association of Home Builders (NAHB), every 100 multi-family units-built support 161 jobs in the first year and an additional 44 jobs each subsequent year. In addition, the jobs supported by the housing development can bring in $11.7 million in local income. This stimulates the local economy by creating short-term and long-term employment and attracting employers and employees.

Affordable housing puts money back into our local community. When residents of affordable housing communities can make their monthly rent/mortgage payments, they have more revenue to spend on local goods and services. This puts money back into our local community through paychecks and property taxes, which can support the creation of new businesses and improve infrastructure and local public services—bringing growth and innovation to communities.

Evictions create instability for families and can harm Dover’s social and economic well-being. Rent payments serve as income for landlords, when a tenant cannot make rent those property owners will have less revenue to draw on for their mortgage payments. A surge in rental property evictions could have a domino effect on the broader housing market and the economy. Fortunately, well-designed affordable housing allows families to have economically stable homes. The Coalition for the Homeless estimates that keeping a family in a home saves taxpayers $38,000 per year in shelter costs. That’s why affordable housing prevents evictions no matter the economic climate and the social and financial return is well worth the investment.

Research has found that providing affordable housing not only helps families secure a safe and stable place to live but is more cost effective compared to homeless shelters, emergency room visits, mental health hospitals and jails. One study found that supportive housing—affordable housing for people living with disabilities that includes wraparound services—saved nearly $32,000 of public funds per person in just the first year, after considering the cost of providing housing and services.

Another long-term economic benefit of affordable housing is the possibility of decreasing childhood poverty. A stable, affordable home allows children to establish healthy habits and focus on their goals and education. Equipping kids with tools for social mobility and providing children with a better and more equitable path is a way to build economic growth for communities and healthier societies. It is estimated that for every dollar spent on reducing childhood poverty, the U.S. would save at least $7 concerning the economic costs of poverty. This has massive impacts on educational achievement and economic output. Increasing access to affordable housing pushes economic growth. Each dollar invested in affordable housing boosts local economies by leveraging public and private resources to generate income. Opportunities for economic development, increased job creation and retention, reduced eviction likelihood, greater tax generation, improved infrastructure, and the ability to address childhood poverty are among the economic benefits of increased access to quality, affordable housing. The bottom line is that everyone benefits from creating and preserving affordable housing. Promoting affordable housing can drive the local economy and help keep communities vibrant and prosperous.

Sources: National Council of State Housing Agencies, STOUT, SSRN, National Association of Home Builders, Investopedia, PEW Charitable Trust, Joint Center for Housing Studies of Harvard University, Housing Matters and Urban Institute Initiative, The Coalition of the Homeless, The Associated Press, Forbes, Economic Roundtable, Forbes

Affordable Housing Myths
provided by the Southeastern Connecticut Housing Alliance

Myth #1: “Affordable housing will lower property values in my community.”
Response: A number of studies have documented that contemporary affordable housing developments have no impact on nearby property values, and in some cases contribute to increased property values. Studies conducted have found that “proximity to nonprofit-developed subsidized housing actually enhances property values.” Studies of low-income family housing developments in suburban areas have even revealed that affordable housing can have a positive impact on surrounding property values. Numerous studies over time from around the country support the general notion that affordable housing has no negative impact on surrounding property values.

Myth #2: “Affordable housing developments are a waste of taxpayer money.”
Response: The largest subsidy for housing in the United States is the federal homeowner mortgage interest tax deduction which totaled $108 billion in FY 2003. This is more than three-and-half times the entire budget for the U.S. Department of Housing and Urban Development, and larger than the budgets of every state except California. And it’s high-income families who benefit – approximately 50% of these benefits went to the top 11% of all U.S. taxpayers. [ 3 ] Homeownership, therefore, is not the embodiment of self-sufficiency and independence from public subsidy as the rhetoric purports. The reason units at a redeveloped or newly constructed “affordable housing” building can be offered at below-market rents or purchase prices is that the up-front acquisition and development costs of financing would be reduced by federal tax credits and grants. In other words, the day-to-day operating costs and the rental income would not be subsidized by the municipality.

Myth #3: “Land in my community is too expensive for affordable housing.”
Response: Expensive land doesn’t automatically exclude the development of affordable housing. Sometimes it’s a better bargain because the land is in better shape. Less expensive land is often in poorer shape and requires more site preparation and increases the overall development costs.

Myth #4: “Affordable housing will look like “cheap housing.”
Response: Affordable housing must comply with the same building restrictions and design standards as market-rate housing. Because it is often funded in part with public money, sometimes it needs to comply with additional restrictions and higher standards than market-rate housing. Affordable housing is not affordable because it’s built with “sub-quality” materials; it is affordable in the sense that it is less costly to live in because it is supported by additional public and private funds.

Myth #5: “Affordable housing will bring more traffic to the community.”
Response: Studies show that affordable housing residents own fewer cars and drive less often than those in the surrounding neighborhood.

Myth #6: “Affordable housing will bring lots of large families to the community, thereby increasing the burden on schools and roads.”
Response: According to the U.S. Census Bureau, rental apartments have fewer children per unit on average than owner- occupied, single-family housing; rental apartments contain a lower percent of units with one or more school aged children; and rental units have a lower average number of motor vehicles per unit. Although not all multi-family rental units are affordable, they make up the bulk of affordable housing.

Myth #7: “Affordable housing doesn’t contribute to the local tax base and overburdens the local property tax system.”
Response: Nationwide, the effective tax rate (property tax paid relative to the market value) for multi-family complexes is significantly higher than single family homes. Thus, multi-family developments pay their “fair share” in local property taxes. Furthermore, as stated above, multi-family housing actually produces less burden on the local tax system in terms of new services generated than single family homes.