Affordable Housing is an Economic Development Benefit

real estate and family home concept - male and female hands holdWhen we think of economic development opportunities that lead to greater prosperity, we are likely to think of major employers such as factories, corporate offices, universities or health care centers. While these are essential to job growth and overall economic health, it is important to mention an often-overlooked sector that provides substantial economic development benefits to the community – affordable housing. According to multiple studies in cities throughout the country, affordable housing provides far more than a social or physical benefit to those fortunate enough to live in safe, clean and affordable housing.

Construction of new affordable housing as well as programs that rehabilitate existing housing stock to make it affordable create a host of jobs, from architects to contractors to others employed in the construction trade. Local businesses that supply building materials and other supplies benefit from the sale of such products or services to the building contractors. Local governments reap the benefit of increased income in the form of occupational license fees or net profits from the jobs and services being provided. Often, affordable housing is constructed on vacant, underutilized parcels because they are more cost-effective to develop. This increases the value of the property, which in turn means increased property taxes that flow to local and state governments and local school boards. This new or renovated affordable housing often increases the value of neighboring properties and can stabilize marginal neighborhoods.

Affordable housing provides economic benefits to those who live in it, too. Households that pay less from their paychecks for housing costs can afford to spend more on other items, including groceries, clothing and health care. They can also afford to save more for emergencies or for major purchases such as a car or education. This provides these households with greater economic stability because it is easier to avoid living from paycheck to paycheck. They are less likely to face eviction or the stress of moving from place to place because they fall short of rental or housing payments. Persons who live in affordable housing tend to be more stable, long-term employees because they do not need to move so often and face difficulties coming to work regularly. Businesses benefit by having a stable employee population because it reduces employee turnover and related costs in training new employees. It also reduces problems associated with lack of dependability as to whether a sufficient number of employees will show up to work their shifts.

Government policies that encourage affordable housing, including programs that provide incentives for private developers to build affordable housing (for example, providing density bonuses or other regulatory relief if they include a certain number affordable housing units in their projects), are an important, if underutilized, way to grow the economy and contribute to the overall prosperity of the entire community.


Christine Neal Westover is an attorney in the Lexington office of McBrayer . Ms. Westover has extensive experience practicing law in both the public and the private sector. The focus of Ms. Westover’s experience and area of practice is land use law since her assignment in 1991 as legal advisor to the boards, commissions and divisions of government within Lexington Fayette County on all matters related to planning, zoning and land use law. Ms. Westover has an extremely deep and broad expertise of the laws governing land use in Kentucky and the procedural and substantive complexities that underpin planning and zoning matters. She also has significant experience dealing with governmental divisions such as Building Inspection, Code Enforcement and other administrative bodies due to their regulatory authority in land use matters. Ms. Westover can be reached at or (859) 231-8780, ext. 137.

This article is intended as a summary of  federal and state law and does not constitute legal advice.