What to Expect in the Affordable Housing Supply in 2023
The US affordable housing crisis has worsened in recent years and experts are not very optimistic for 2023. Inflation has greatly burdened developers who are struggling to meet increasing demands due to soaring prices of construction materials. And with the gap in income and rent cost consistently becoming wider over time, the problem does not seem to go away so soon.
According to the National Low Income Housing Coalition (NLICH), there are over 7 million in affordable housing backlogs across the United States for those below the poverty guideline or 30% of there area median income.
The NLIC further identified states with the least available supply of affordable housing for rent which include Oregon, California, Nevada, Arizona, Colorado, Texas, and Florida. The disparity in supply availability is not that huge and there is no state with sufficient supply of affordable homes for rent.
Financing is Becoming Hard to Find
Record-high inflation has made investments for housing development even more elusive. The affordable housing sector is walking on thin ice with the ballooning production cost and consecutive interest rate hikes in affordable housing financing. While the American Rescue Plan Act and notable actions from state housing agencies, the problem remain considerably huge to keep hopes high for an immediate solution.
Even with these policies and resources, affordable housing developers had rough time securing sound financing and the trend will continue in 2023 as no major positive shift in the economy is to be expected.
What These Means to Low-Income Families?
The continued worsening of the affordable housing situation in the country has becoming a social issue that is gravely impacting countless lives today. With solutions nowhere near, the problem could escalate as more and more families struggle to make ends meet with rising commodity prices and consistent inflation hikes.
This also means that more and more families will be forced to moved out of their current homes as Increasing rental rates are becoming hard to cope with. As a result, we will be able to see increased homelessness, more delinquent renters, rental homeowners with no income, and overall struggling communities.
Alternative Solutions
Current policies are clearly insufficient to totally address the affordable housing crisis, but these policies, when further strengthened, can serve as foundation for robust changes in the affordable housing market.
Continually putting pressure on investors and providing incentives for affordable housing financing can go a long way. There should also be focus in financing small affordable family homes projects and expanding housing ownership opportunities.
Private foundations and corporations should also look into providing aid and support to nonprofits and organizations focused on alleviating the situation. This will help speed up the production of affordable housing supply for families who need them the most.