After living in your neighborhood for 20 years while jogging you notice a big parcel of land with a sold sign. It says a large housing development is on its way and will house more than 300.
Your first thought is ‘Oh, no there goes the neighborhood’ and the property value of your home.
This is not always the case.
Before prejudging, you might want to have a better understanding of the economic impact a large housing development project (sometimes known as affordable housing) can have on a city, town, or neighborhood.
Whether it’s a high-rise or one level, large housing development projects can impact a community, its quality of life, and the area’s economy.
If you live in a community where a large housing development project is being planned or is already built, understanding the economic impact of how such a project can make or break a neighborhood is important.
While this project may be coming to your town in a few months or has been under construction for 6 months, consider the project a good thing.
Why? Because the lack of safe, affordable housing is costing U.S. cities in many ways.
For instance, cities that don’t offer affordable housing solutions may force out new residents, they could lose potential workers and discourage growth in a local economy.
Those residents who reside in safe housing may not know what poverty is, but its effects can harm a community – there’s a lack of healthcare, shopping, businesses, education, and more.
When a large housing development project enters a community, it can open more opportunities for people at all income levels. This means more money is available for spending in a community, and long-term change can begin.
Also, for a lot of people, rent is their biggest and most important monthly expense. When income loss threatens the ability to make rent, the chances of spending money on anything else can harm a local economy.
But when residents of large housing developments do make their rent payments, they’re able to spend more on local purchases — and buy more than the basics at their nearby businesses.
Did you know about 108 million Americans live in a rental home or apartment, and one-fourth of renters spend more than half of their monthly income on rent payments? This equates to possibly millions of people being on the brink of losing their housing.
Evictions spark a cycle of instability for families and this can have a ripple effect in communities such as its social and economic wellbeing.
Therefore, housing stability is at the center of affordable housing — it works to prevent evictions regardless of the economic climate, and the social and economic return can be worth the ROI.
Another huge economic impact of a large housing development means the creation of more jobs especially during construction and long-term societal growth.
During the building stage, manufacturing and construction companies will need to hire people to perform various roles. Then, the housing development itself will need to hire people for continued maintenance, operations, and leasing jobs.
Various long-term opportunities in large housing development projects trickle down to the local economies.
And the healthier an economy is, the more jobs will be needed, thus bringing in more residents, too.
And when this happens, the more residents that move in, the more property taxes are being paid in the community and, the local government can give more to residents.
A study from the National Association of Home Building states, “100 affordable rental homes generate $11.7 million in local income, $2.2 million in taxes and other revenue for local governments, and 161 local jobs in the first year alone.”
This increased revenue may mean improved infrastructure, additional green space, and other amenities to offer residents a healthier and safer lifestyle.
Lowers Child Poverty
Another long-term economic benefit of large housing developments is the opportunity to lower childhood poverty. Providing children with a better and more equitable path forward is one of the best long-term ways to build economic growth and healthier communities.
According to Mark Rank, a Professor of Social Welfare at Washington University, “It is estimated that for every dollar spent on reducing childhood poverty, the country would save at least $7 concerning the economic costs of poverty.”
So, the next time you notice a sign that says a large housing development is headed to your area, don’t fret, instead, welcome how it may strengthen your community for future growth.