Today, everyone knows that the need for affordable workforce housing is crucial, and it is essential to address and resolve the same. However, the challenges of investing in this segment are not about the financial cost alone says Maxwell Drever. Instead, it also involves the absence of updated public land inventory, the fluctuating variations in housing expenses, the zoning rules that limit the production to merely one or more kinds of buildings, and increased construction expenses. Hence, the expense of generating affordable housing got impacted to a great extent by the construction expenses.
A few important aspects to consider
Even though reduced construction expenses are essential in minimizing rents, other factors affect the rent levels. It comprises the composition and size of the household, the workforce status, and the educational level of the adults.
According to Maxwell Drever, the workforce status is essential as it can address if the head of a family can work 40 hours weekly or is searching for work. If the person is searching for work, they should be able to take new scopes of employment. That can come up from various areas. And when there are such scopes. The family will find that their earnings are increasing, and they would opt-in for renting homes that will provide better comfort and space.
Hence, while the housing policy should identify the role played by the construction cost in producing affordable housing. It should also identify the huge impact on the level of rent generated from workforce participation. The main goal here is to assess the efficiency of inclusionary zoning in maximizing affordable rental production. While restricting the negative effect on the market-rate development. It can act as a commentary on how the states can improve the effectiveness of the program.
Today, most experts find that inclusionary zoning maximizes the production of affordable housing. Which has very few negative impacts on the development of the market rate. And in most cases, the following findings are crucial:
- Even though this approach doesn’t generate ample affordable housing units. To make an instant dent in the severe shortages in the state. It does offer an important tool for addressing the long-term requirements.
- The success depends on the inclusionary zoning mandates that apply to the new construction. Instead of needing those units to get incorporated with the current buildings.
- The inclusionary zoning gets more successful when it gets combine with the extra subsidies. Either via the direct capital grants or through the tax credits.
- Things are more successful when the rules get applly on a project instead of a neighborhood level.
- The maximization of affordable workforce housing can differ to a great extent based on the region. It also depends on the bond between the construction and land costs.
- It is challenging to design an efficient program. As every state’s market varies drastically in its housing demand, cost structure, and cultural preferences.
Last but not least, Maxwell Drever says that the local opposition also has an essential role to play in the development. Therefore, when you are planning to invest in affordable workforce housing units, you need to consider these aspects.