When you think of affordable housing, what do you picture? You may be picturing older, run-down buildings that aren’t well kept or desirable. This is a common misconception. In fact, many affordable housing properties are not only new, but come full of desirable amenities and house residents who have incredible pride in where they live. Because comfortable, affordable housing is foundational to thriving communities, it’s important we all pay attention to affordable housing and what it is doing, or could be doing, for our communities.

What is affordable housing?

Affordable housing is rental housing that is available to people based on their income. It is sometimes also called low-income housing or income-based housing. Affordable housing developments – some of which are new, some of which are rehabilitation projects – utilize the Low-Income Housing Tax Credit (LIHTC) program created by the Tax Reform Act of 1986. According to that program, state and local agencies provide tax credits for the development of affordable housing communities, and the properties in turn offer more affordable rental rates based on resident income levels. This program has been the most important resource for adding affordable housing communities in the United States.

Where are affordable housing communities needed?

There is not a single statistic that can define whether or not affordable housing is needed in a particular community. In fact, most affordable housing developers pour incredible resources into research in a particular area, ensuring they understand the existing affordable housing options, local employment rates and housing challenges.

There are many cities within the country that are in desperate need of affordable housing right now for a number of reasons. Some examples include cities where there are low unemployment rates, but few rental options, or college towns – like Bloomington or West Lafayette here in Indiana – where the rental market is highly saturated by students and costs are driven up.

How does affordable housing improve communities?

Because affordable housing properties are typically strategically planned in locations that truly need them, the impact on the community is great. Affordable housing communities help families get back on their feet. Some of our properties, for example, have become home to formerly homeless residents. These people weren’t homeless because they had no income; they were homeless because there weren’t any affordable rental options near them.

In Indiana, there is a shortage of rental homes that are both affordable and available for lower-income households. According to the National Low Income Housing Coalition, the shortage exceeds 132,000 rentals. Often, people who can’t find affordable housing will end up spending more of their monthly income on housing than they should be, sometimes sacrificing things like healthcare and food so they can make their rental payments on time and avoid eviction.

There is a common misconception that renters don’t care about where they live and therefore don’t take care of their home. While this may be true for some individuals, it’s rarely something encountered with affordable housing. Many affordable housing properties are leased before they even open, and have wait lists after that. Because these spots are so coveted, people who live within these communities are often model renters.

In addition to providing good neighbors, affordable housing communities can benefit the cities and towns where they’re built. In some cases, businesses struggle to find professionals to fill job openings due to a lack of housing options nearby. Affordable housing can help in these instances, providing safe, affordable and conveniently-located housing for potential employees. As mentioned above, these communities can also reduce homelessness in an area. Finally, affordable housing offers new rental options to a market, which can help to drive down surrounding rental costs over time by filling some of the housing need.

Many people have their own negative, pre-conceived notions of what affordable housing is, but so often they’re wrong. Housing legislation has evolved many times over the last few decades, and some of the terminology can be convoluted and confusing. But, all of the changes have taken place in an attempt to get this right. Housing matters so much because a safe, clean and comfortable place to live brings about a better quality of life for any person, whether renting, utilizing affordable housing or owning. Every Hoosier deserves to have quality housing they can afford available to them.

Kyle Bach is the CEO of The Annex Group, an Indianapolis-based, leading workforce, affordable and student housing developer.

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