Analysis of Affordable Housing Supply

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Physical form of housings

Considering the integral appearance of a community or a street, new affordable housing projects are likely to be visually obstructive and have externalities. The size, material, height and appearance can have an impact on the community opposition. Apart from that, the maintenance of housing projects is also recently concerned by objectors. There is often a common view among opponents that affordable housing projects will be in poor maintenance. (Tighe 2010)

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Finance

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Insufficient Return on Investment

As the affordable housing is provided below market value, the revenues are always not sufficient to cover expenses. Especially for private sources, in general, the returns from affordable housing investment are too low to be appealing. For example, about rental housing supply, there are two types of requiring costs: capital costs such as development investment, ongoing costs including management and maintenance fees. (Lawson, J. et al.2012) Generally speaking, there are less institutional investors for affordable housing who are more likely to focus on high cost and high rise apartments, with more yield return

2.2.2 Limited Government Funding

At present, there is the fact that only limited and insufficient direct and indirect government funding invested to affordable housing supply, including assets such as useable land provide for affordable housing. (Sheko, A., Martel, A. & Spencer, A. 2015) Much of the expenditure of government has been spent on maintaining aging public housing, thus funding across all levels of government has been reduced accordingly.

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Response and Solutions

3.1 Increase land zoning supply

In order to provide more housing supply relative to demand, increasing land zoning supply plays an important role, especially for higher density residential projects in downtown or outside the metropolitan area. Besides, it can help to afford opportunities for lower entry points to the housing market, and to provide a greater supply of housing stock that is likely to become available through the rental market.

3.1.1 Using Government Land

Reuse of the public land can be beneficial for the development of affordable housing, especially if the land can be rented or sold below market rates. In order to accomplish it, there should be formal requests for affordable housing (e.g. covenants or contracts) to adjust the residual land value and its purchase price (Davison et al., 2012). For affordable housing, fully utilized land owned by local governments might be regarded helpful. The land is generally used for car parking, warehouses, and other community facilities. In the case of parking, it is possible to reserve the ground level for parking and carry out development above.

3.1.2 Site selection

Selecting sites and designs of affordable housings play an important role in improving and increasing housing supply. The appropriate affordable housing sites should be the locations that are likely to bring about the least negative statistical impacts on crime rates and property value. (Galster et al. 2002). For example, the form of low-cost housing should be built in appropriate and permitted cases, such as the top of the shop houses, hostels, and manufactured homes.

3.2 Deliver greater housing diversity

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Rehabilitation of existing properties

Based on Galster et al. (2003), compared to large and dense housing projects, low-poverty neighborhoods are easier to be accepted by host communities owing to less influence to the surroundings and no impact on nearby property values. Thus, instead of constructing new dwellings, many US affordable housing providers tend to obtain or rehabilitate those existing small multi-unit blocks or single-family houses. (Hogan,1996) In this way, the impacts and defects can be prevented from adding to public properties. Moreover, the new housing would blend in well with the nearby community and streets. Actually, the rehabilitation is welcomed by the neighbors, for its enhancement of the overall appearance of a neighborhood. In contrast, new development projects are often considered more challenging owing to its outstanding new appearance and higher possibilities to influence the integral appearance of the surroundings. Therefore, rehabilitation of existing properties should be favored through decision process about the site selection of affordable housing.

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Two Alternative Typologies

With the development of society and gradually changing demographic features, the types of dwellings and supplementary facilities should be altered more various and innovative to meet the needs of our future city population. Since the inadequacy of land supply and expansion of population, what we need are new housing types that can afford more tenants. The traditional types are less efficient with the changing demand of the market. Two innovative affordable housing types below demonstrate how they can create more units in less space, providing more options for citizens according to their specific needs.

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Micro-Unit Development

A micro-unit is a type of space-efficiently-designed dwelling unit through reconsideration and redesign.(Klinenberg, 2012) Micro-units are designed with the aim of appealing young professionals who are willing to live in smaller units in return for easy access to urban amenities in downtown locations. In general, households are becoming smaller and more people are living alone than ever. This unit can reduce demand among singles shared multiple bedroom units, thus making those units available lower-income families (Kallach, 2012).

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Accessory Dwelling Units (ADUs)

With the aging population, there is a growing trend of multi-generational households. Accessory dwelling units often referred to as secondary units, attached to the main residence, in a basement or above a garage. It is beneficial of densification in lower-density areas. First,