In the past few years, the COVID-19 pandemic has contributed to the ever-increasing demand for affordable housing. Paying high rent for housing has not only become a challenge for the low-income groups but has also created other related crises. Housing affordability is now creating stress for middle-income families, philanthropists, local governments, and employers. These middle and low-income groups coming from humble backgrounds are finding it hard to balance their expenses. Hence, various governmental and non-governmental organizations have come forward with strategies to support the efforts. They are debating on new strategies for addressing the issue.
These individuals come from professions of teaching, Social workers, police officers, and janitors. The rationale behind housing subsidies gets targeted towards these middle-class individuals. If you look at past policies, you will understand that workforce housing is not a recent problem. It has had economic and political implications on different sectors of society in the past.
The difference between affordable and workforce housing
Workforce housing is a program targeted towards households earning two less to qualify for luxury housing. Hence, governments are developing rental subsidy programs to deal with this issue and provide the latter with affordable shelters. According to Maxwell Drever, households earning between 50 to 60% of median income are the target population of these policies. The concept of the workforce has become a controversial issue in recent times.
The role of homeowners and investors
Going by recent survey reports, more than 35% of households get transformed into affordable housing estates. These real estate properties in the metropolitan areas get converted to provide affordable housing for lower-middle-class individuals. Along with this, various new real estate projects got undertaken to attract residence from these sections.
Now that there are new real estate projects, it has benefited the investors financially. They are getting various incentives and subsidies from the local governments, which are adding to their prophet. More and more low and middle-income residents are moving into the metropolitan areas, says Maxwell Drever.
So the purchasing or renting of homes is adding to the property tax of the government. The middle-class residents with disposable income have to spend on restaurants, groceries, dry cleaners, and movies. Hence, household rent is an added burden on them. To solve this issue, various non-governmental agencies and social workers have come up to offer their help. They are investing in real estate projects to bring about a positive change.
Research reveals that the real estate project requires a smooth flow of capital. Hence, financial institutions like banks are providing easy loans and mortgages to these individuals. Various hotel owners and homeowners are taking advantage of these loans for boosting construction projects.
On the other hand, local governments are also imposing regulations on these projects. Hence, rules and regulations are imperative in converting hotels to housing estates and constructing new housing estates. The varieties of housing programs have to adhere to these regulations to take advantage of the government’s comprehensive incentives.