What Happens When Markets Don’t Include Attainable Housing?

Let’s paint a picture.

Imagine a community with big, beautiful homes and sprawling yards, pothole-free streets (!), excellent schools, and an endless array of amenities for residents to enjoy. If we could only make the sun shine 365 days a year, it would be perfect! Now imagine that same community when few can afford to buy in. When the people who motivate the minds at those excellent schools, maintain the roads, man the services, and mind the shops have to commute in from 30, 45, 60+ minutes away. When they finally say, “It’s not worth it” or “I can’t afford it” and move somewhere more amenable to their means.

What happens when communities do not include attainable housing? You’re looking at it.

When Attainable Housing Is Not A Priority

By definition, attainable housing is non-subsidized housing that is affordable for people earning between 80% – 120% of the area’s median income. In Indiana, this is about $54,000, which means the dream of purchasing a home would be realistic for those earning between $43,200 and $64,800. As it stands, the average home price is over $316,000. This prices 76% of the population out of the market.

When people cannot afford to purchase homes, the entire community feels the pressure:

• Lost Potential. The dearth of housing stock has cost the United States over $400 billion in lost GDP over the past two decades. While this has made the headlines in recent months, it is far from breaking news for those who cannot afford to live where they work.
• Stalled Economic Development. When we fail to account for attainable housing, we lose on a bottom-line level. Per the National Association of Home Builders (NAHB) Fiscal Impact Study:

• Continued Labor Shortages. It is not a coincidence that we are facing deficits in both housing and labor. As Business Insider puts it: “The shortages are two sides of the same coin. Cities with the most job openings don’t have the affordable housing needed by many workers. And areas with cheaper housing don’t have the promising labor markets to make them attractive.”

  Indiana is projected to add 275,000 jobs in the next two decades. To accommodate that growth, we need to create approximately 180,257 units, or 9,000 units annually. The state is under-building by 1,750 every year. We have, and will have, the employment opportunities — but where will these essential workers live?

• No New Homeowners. When attainable housing is a factor in the market, more people can purchase homes. It seems obvious, sure. But with greater accessibility, we create more “move-up” buyers who stay in the municipality as their needs change. They put down roots, invest in their communities, and, of course, pay into the local tax base.
• Lack of Diversity. Markets that do not include attainable housing risk becoming homogenized and excluding people based not only on income and education/employment attainment, but, tragically, race, ethnicity, gender, and other factors. When housing is accessible by more people, the characters of our communities are enriched socially, culturally, and, yes, economically.

Interested in what happens in markets that do include attainable housing? Learn about Denver’s Central Park.

What Now?

The point isn’t to paint a picture of a dystopian society. Instead, it is to highlight the immense opportunities in front of us to build strong, thriving, economically and socially diverse communities. This is the future that can, and ideally, will, be in front of us. When markets include attainable housing, Hoosiers realize direct benefits in terms of tax base, workforce health, and quality of life. For all of us.

Learn how attainable housing builds stronger communities — and how you can join the conversation for a more diverse, sustainable future.