Making Real Estate Developments More Affordable | Lane Lowry
The importance of affordable housing cannot be overstated. Yet, the U.S. is currently facing an affordable housing crisis, which has been made worse by the recent pandemic. People are having a more challenging time finding houses that they can comfortably afford. Worse, there are fewer homes to be found for lower-income families.
Affordable housing goes beyond a personal crisis. It goes beyond families. This is a social and community concern and should be addressed as such. Some steps can be taken to help create more affordable housing for all those that need it.
It Starts With An Understanding
The first step in reducing costs on apartments and homes is understanding where that cost comes from. Understanding the value of materials that go into building and the labor is a vital part of this. Understanding the cost of land and taxes is another critical piece of the puzzle.
According to Brookings, in the U.S., the demand for rental properties (from apartments to single-family homes) far outweighs what is available. In other words, while the demand for rental properties is on the rise, their construction is on a decline.
Reducing the Cost of Land
When a developer has to pay a large sum of money for a property, they face a potential loss. The only way to gain back the money spent is to keep the property at a higher cost.
According to Ridaa Murad, to encourage more developers to create affordable housing. First, the price of the land itself needs to be reduced. There are ways to go about this process, but it will be highly individualized based on the company and location.
On the subject of land, there must be a certain sense of efficiency in the planning process to create more affordable housing. Location plays an important role here. Picking locations that make access to jobs would be advantageous for many and could help turn the crisis around in the long run.
Home Buying Programs
A concerned real estate company could help their community out by ensuring affordable housing initiatives in the area. This includes funding programs that provide down payment assistance, support minority homeownership, and more.
Hillary Legrain of First Savings Mortgage Corp is a firm believer that real estate companies must support homeownership for all — across all socioeconomic levels. In doing so, we create a healthier and happier community.
Article originally published on LaneLowry.co