Affordable housing is intermediate and rented accommodation offered to particular households keeping in mind their eligibility, whose requirements cannot get fulfilled by the housing market says Maxwell Drever.
The requirement for affordable housing for the workforce
There are plenty of reasons behind the inherent need for affordable housing.
The rising population is a significant reason behind the need to create affordable housing. Second, Prices for housing and real estate have also been rising in high-opportunities areas, while the number of existing housing is relatively low.
The growing rift between demand and supply has urged the need for affordable housing, especially for the workforce. With government policies aimed toward low-income groups, the workforce suffers as their incomes are higher to qualify for subsidies but are lower to afford market rents, explains Maxwell Drever.
Funding for affordable housing
Funds for affordable housing come from two primary sources, the construction industry and taxpayers. The public authorities provide housing grants to create affordable housing units. There are specific figures allocated, and on average, a particular percentage becomes assigned to each home.
Private developers for affordable housing units
Private developers help generate a large portion of affordable housing units for the workforce through cross-subsidies on profits from ‘market’ estates. Moreover, Private developers or house builders also put in funds to create affordable housing units. Through negotiations, a specific figure becomes set as a contribution.
Types of Affordable housing
Affordable housing systems focus on housing as a commodity in the market. The rising rate of in-affordability for the workforce is proof that the system as a market commodity cannot meet the increasing demand for affordable housing units explains Maxwell Drever. In recent times, different strategies got implement to secure affordable homes for the working class and their existing resources.
There are four types of affordable housing available:
- Public housing: In this type of affordable housing, the housing unit is own and functions through public agencies instead of private or not-for-profit developers. The public authorities fund the housing unit by incorporating subsidies and limitations on rents.
- Not-for-profit renting housing: These housing units are made affordable through not-for-profit organizations using public investments and taxes, and grants.
- Affordable housing programs
- Affordable units at the market rate
The importance of increasing supply for affordability
Solutions to bridge the gap between the increasing demands for affordable homes for the workforce are plenty and can bring fruitful results once incorporated. However, the increase in supply needs to be a central focus for any strategy to help solve the affordability crisis.
Regulatory measures and subsidies can also help change the affordable housing and home assistance to targeted populations. However, in plenty of regions, the demand for affordable housing units is higher, but the supply for these housing units is far behind.
The affordable housing crisis might continue to face a global shortage. However, you can also overcome the need with carefully planned strategies, indicates Maxwell Drever. The latest efforts from the government can also bring a drastic change. Methods and techniques become necessary to make it a reality.