New federal regulations positively impact affordable housing development and design
New administration’s goals present opportunity to elevate affordable housing design and value
Shelter. It is a basic human necessity. It provides protection in comfort. This security gives people the ability to venture forth and make a life. The current challenge is that there is a high demand for affordable housing. Housing should not cause financial stress. All too often, affordable housing is designed to the lowest common denominator. Sometimes, it is just a mandate for larger, more expensive developments. Demand is high. Does affordable housing truly get the attention that is needed?
“The new administration’s ambitious plan for increasing affordable housing squarely puts the challenge to the developer and design community to help everyone do better by creating better experiences.”
What we do know is that during this pandemic and economic downturn, there is a great need for affordable housing and the demand is rising. Affordability is defined by having payments/rents that only take thirty percent (30%) of someone’s income, leaving their remaining income for expenses and savings. The challenge with the rise in rent growth, coupled with the rise in jobless rates, is that affordability has been challenged. Nearly every region of the United States has this challenge.
In a good economy, affordability is still a challenge. It gets masked by overall prosperity. Affordable developments, if done well, can be stable investments. We are seeing these types of developments as longer term holds that provide stability to a portfolio.
The new administration’s ambitious plan for increasing affordable housing squarely puts the challenge to the developer and design community to help everyone do better by creating better experiences. Well-being is a significant goal of this new agenda.
What Makes for a Successful Affordable Development?
Accessibility is a key point. In the macro-sense, there needs to be affordable housing developments in the right locations to make it viable. Making affordable housing integral to neighborhoods is vital. Mixed-income developments have the potential to reduce travel, which stresses the infrastructure and environment. Due to the current and projected demand, quality affordable housing will see +90% occupancy rates. It might not be big profit, but it will be steady profit.
“What we do know is that during this pandemic and economic downturn, there is a great need for affordable housing and the demand is rising.”
In the micro-sense, affordable housing should be physically accessible for those with physical impairments or for the elderly. It is critical to think about how populations age and how to adapt affordable housing to support all age groups within a community.
For affordable developments to be successful, there needs to be stability in the surrounding community. People create that stability by working and shopping locally. Stability is supported by walkability that allows ease of access to schools and commercial centers. Neighborhoods with 18 hours of commercial and community prime activity tend to thrive. Crime is a challenge to any community, but as we are seeing, strong communities have strong relationships with their first responders and their school districts in addition to their own activity. Individual developments can fit successfully into the fabric of a neighborhood by being properly lit, having good oversight of the surroundings, and providing the potential for ample human interaction.
One key component in the new legislation is the importance being placed on environmental impact. New developments need to be built to higher energy efficiency standards and use safer materials to reduce environmental pollution both inside and out. Part of being a strong development is not negatively impacting your surroundings. The proposed legislation would have affordable housing become a prime example of what could be possible.
What we have learned through improved design with regards to energy efficiency and low emissions is that these projects tend to have lower operations and maintenance costs and see better returns on investment. A development with continual high occupancy and low operating cost makes for a good portfolio investment. Modularity could further reduce impact and footprint by offering real opportunities that benefit job creation and speed to market while maintaining high standards for efficiency and reducing waste. Innovation will be a key performance factor for success. The benefit of energy efficiency is that it again makes it more affordable long term for the resident.
Durability is also essential to the long-term success of affordable housing. If properties are easier and cost-effective to maintain, then the necessary upkeep will occur, and value will be maintained. Value is what makes a development an asset financially. Durability is what makes a development an asset to the surrounding community.
This is a time when market demands need innovation and thoughtfulness to create effective affordable housing suitable for today and for the long term. Legislation now demands it. It is a real opportunity to create value in an affordable development by increasing the standards of care. This will bring both equity and equality to communities, but more importantly, it will create opportunity on many levels.
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