Affordable Housing and Inclusive Development

Affordable housing refers to housing affordable with a household income at or below the median as rated by the local government recognised by an affordability housing index. Affordable housing includes mortgaged houses, emergency homeless shelters, transitional housing, non-market rentals, and indigenous housing ending with affordable home ownership.

The need for affordable housing increases due to rapid urbanisation and global development. Most of the world’s population now lives in cities, which will continue to increase by 70% in the upcoming years. While urbanisation is expanding and moving the global economy forward, inequality and exclusion within the cities also increase, which may derail the development progress. However, building inclusive cities or affordable housing remains challenging, leading to urban residents living in slums with inadequate services in this developing world.

Many urban planners consider the lack of affordable housing to harm a community’s health. One of the major challenges of affordable housing is the labour market performance and transportation, as it makes low-cost labour scarcer and increases the demand for transportation systems. Spatial, social, and economic inclusion are major factors contributing to affordable housing.

Affordable housing and inclusive development are interconnected to create sustainable and equitable communities. To encourage social and economic diversity within communities, affordable housing is essential. Inclusionary development ensures that people from different income groups can live together in the same neighbourhood by providing housing options at various price points. Taking everyone’s requirements into account, including those of people with impairments or mobility issues, is known as inclusive development. It applies universal design principles, which call for building homes and other structures accessible to and used by people of all ages and abilities.

The establishment of mixed-use, mixed-income neighbourhoods is encouraged by inclusive development. It encourages dynamic, walkable neighbourhoods by combining cheap housing with commercial, retail, and recreational areas. The value of locating essential services and amenities within or close to communities with cheap housing includes hospitals, schools, public transportation places, parks, and recreational areas.

The community is actively involved in decision-making processes through inclusive development. To ensure that the creation and administration of affordable housing align with the community’s needs and ambitions, it invites engagement from residents, community organisations, and stakeholders. Gentrification and displacement have negative effects that inclusive development seeks to lessen. It includes tactics to protect the current supply of cheap housing, stop the loss of affordable apartments, and aid disadvantaged groups in danger of eviction.

Challenges

The promotion of affordable housing is stopped by high construction and land costs. The materials, labour, permits, and regulations can make it difficult to build housing units at an affordable price. Compared to demand, there are frequently not enough affordable housing units available. It becomes difficult for people and families with low to moderate incomes to find inexpensive solutions due to the imbalance between supply and demand, increasing competition and raising prices.

Local communities often oppose affordable housing projects in their neighbourhoods. Regulatory barriers like approval procedures, zoning restrictions, and building codes can increase costs and delay projects. The creation and upkeep of affordable housing depend heavily on adequate finance. However, raising enough money for affordable housing may be difficult due to a lack of public resources and competing priorities. It can be difficult for developers to get financing, and there might be few tax breaks or subsidies.

Rising property values due to gentrification push out low-income residents who can no longer afford to live. Low-income individuals and families find it challenging to afford housing due to the rising income inequality in many nations. Finding adequate and affordable housing options is becoming more and more difficult due to stagnant wages and growing living expenses. Coordination and cooperation among numerous parties, including governmental bodies, nonprofit organisations, developers, and communities, are necessary to address the affordable housing challenge effectively. Initiatives for affordable housing can be limited in their effectiveness and growth if there is a lack of coordination and dispersed efforts.

There needs to be more housing options in this sector. The urban poor are people with low incomes and need better living options. Many times affordable housing needs more connectivity from city centres. City centres are business areas with high land values, unsuitable for affordable housing, which leads to building houses away from the city centres and connectivity issues. People living in cities consider affordable housing as an investment. This means there is a need for more houses while there are vacant homes. They are kept vacant to be sold later for a better profit. 

Strategies

While affordable housing deals with various challenges, traditional interventions have focussed on physical improvements and development strategies. Developers must include a specific proportion of affordable housing units in new residential complexes to comply with inclusionary zoning laws. The public and private sectors can work together very successfully to build affordable homes. Governments can contribute incentives, subsidies, or land, while private developers can contribute their resources and experience to build affordable homes. Developers who include affordable housing units in their projects may be eligible for tax incentives and abatements from the government. These incentives lower building costs and increase the financial viability of affordable housing for developers.

A continuous and dependable source of income for projects promoting affordable housing can be found in the creation of housing trust funds. Taxes, fees, or contributions from public and private entities may be used to raise these funds. Governments can enact land-use regulations that put affordable housing first. This may entail changing the use of the property for affordable housing, lowering parking standards, and expediting the procedure for approving affordable housing development projects. Promoting effective land use and lowering transit costs for locals are two benefits of encouraging the construction of affordable housing near transport hubs.

Alternatives to traditional, larger residences that are more inexpensive include building smaller, more compact dwelling units. The land is purchased and held by community land trusts for the benefit of the neighbourhood. They provide the land for sale or lease at a discount to people or businesses dedicated to creating and maintaining affordable housing. Considering novel funding options can increase the viability of affordable housing projects. Accessing low-interest loans, utilising public-private partnerships, using crowdfunding websites, or looking for grants from charitable organisations are a few examples of how to do this. Governments should examine and change rules and building requirements to save on construction costs and speed up the process of creating affordable housing.

References:

Bank, T. W., 2019. World Bank. [Online]
Available at: https://www.worldbank.org/en/topic/inclusive-cities#1

C, C., 2022. IJERT. [Online]
Available at: https://www.ijert.org/challenges-in-affordable-housing-sector-in-india
[Accessed 11 02 2022].

Khandekar, S., 2019. my liveable city. [Online]
Available at: https://www.myliveablecity.com/book/detail/affordable-housing-inclusive-cities

Wikipedia, n.d. Wikipedia. [Online]
Available at: https://en.wikipedia.org/wiki/Affordable_housing#Affordable_housing_and_urbanization_2