The world has been witnessing an affordable housing shortage for a very long time now. The problem needs ingenious solutions to create better, comfortable, and affordable housing for all, especially those with low incomes. In such a case, you can create two different kinds of accommodation. These may include:
- Dedicated housing made affordable for moderate and low-income groups
- Affordable housing units built for renting or selling
The approach that each type takes is very different from the other.
- Dedicated housing is created explicitly for moderate or low-income groups. Developers use aid from public resources to develop such household units or through incentives or affordability needs.
- While in the second type, housing systems were created without the aid of government subsidies. These housing units are for the market to be sold or rented at affordable rates. However, they have no legal binding to meet affordability requirements.
Each of these types gets further explained below.
Dedicated housing made affordable for moderate and low-income families
Previously, the governmental authorities remained the only provider of construction funds to develop affordable housing systems, elaborates Maxwell Drever. Currently, dedicated housing at reasonable levels comes through subsidies and funds offered from various sources. The sources also involve government authorities at every political subdivision, charity, and financial organization.
Other similar home systems come through incentives or affordability requirements as established by the government of that region. The dedicated units are generally created by developers that work for a profit. Under normal circumstances, their focus is not on affordability. However, they do it for project approval.
Dedicated housing systems have legal restrictions that bind people to meet the affordability requirements. The limits extend to occupancy and time duration under which it may remain affordable to the particular type of income households.
Sometimes, dedicated housing units are the only housing system referred to as affordable housing.
Affordable housing units created for renting or selling
The private sector also offers housing units for renting or selling at affordable rates. This type of affordable unit is often older because, over time, their rents tend to have become cheaper. Newer properties can be a reason behind the reasonable rate of private housing units. Other causes may include type, quality, or location. Unlike dedicated affordable housing, private markets do not use direct governmental subsidies.
For most situations, creating newer affordable housing units for low-income families is not economically practical. Without governmental subsidy aids, it gets more financially tenuous. Maxwell Drever explains the renting or selling rates set for low-income groups are not sustainable to match development and construction costs.
However, with the emergence of new housing systems, existing unit owners lower rents and selling rates to continue remaining in the competition.
The creation of both types of affordable housing plays a significant role in meeting the high demands for affordable housing.
Affordable housing can continue to cover the aggressive global shortage of affordable housing with carefully curated policies and aid from public sources. Government authorities can join hands with developers to build affordable homes for low and moderate-income families.