As Congress continues to review tax reform proposals that could have a huge impact on affordable housing production, it's time to remind them that affordable housing adds huge value, not just for tenants, but also for investors, communities, and government.
There is an endless amount of places where investors can put their money today to reap financial rewards — particularly thanks to countless new technological innovations. Investing in affordable housing is smart because it's not only socially conscious, it is also a safe way to reap huge financial gain. Here are some concrete reasons why making an investment in affordable housing is a smart idea.
The Demand for Housing is Practically Unlimited
According to recent reports, affordable housing stock is currently low across the United States. In fact, a recent study by Freddie Mac showed that the amount of available affordable housing in America dropped more than 60 percent between 2010 and 2016. This means that there is a high (and perhaps increasing) demand for affordable housing — which means that an investment into affordable housing is relatively low risk and offers a relatively reliable ROI.
It Has a Positive Impact on the Economy at Large
Investing in affordable housing doesn't just mean that a person's financial situation is going to improve. The development of affordable housing options can also improve the economy of the area around those developments — which can have a positive impact on an individual's life as well. A study by the National Association of Home Builders showed that on average, the construction phase of building 100 affordable housing units leads to the creation of 120 more jobs and that having people live in those units can create a ripple effect that creates more jobs in a wide range of industries — like healthcare, education, retail, local government and more.
Additionally, construction of affordable funds (and construction in general) produces funds that help local governments. Fees that accompany zoning changes, permits and more generate valuable revenue, which city and state governments can invest in improving other areas of a community.
It's a Socially Responsible Investment
Sure, one option for investors is to invest money in a way in which only they directly reap the rewards. However, investing in affordable housing has a positive impact not only on an investor's wallet and the economy, but also on society at large. Investing in affordable housing is a socially responsible investment, or an ethical investment. Ethical investors often finance projects that serve under-served communities, or they invest moneys in ways that encourage responsible business practices.
By ensuring there are more affordable homes available, investors can help decrease the problem of homelessness in America. They can also help people avoid some of the other negative consequences that often accompany the affordable housing shortage. For example, by helping to provide more affordable homes for very low-income Americans, investors can reduce the risk of a public health crisis, help improve the education of children who would otherwise be impacted by having to move between homes and schools, boost the amount of spending at local businesses, and ultimately create a cycle of improvement that can continuously build upon itself.
Investors who are interested in investing in affordable housing can get in touch with us at ViaHome. We have created a platform where investors can easily view upcoming affordable housing projects from developers and decide where to invest. This makes the process of making a socially responsible investment easier and more convenient than ever.