Whether Affordable Housing Policy Should Be Continued

Whether the Affordable Housing Policy should be Continued
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Chapter Summary
Housing is a major problem that affects the majority of the United States families especially the one living in urban areas. The cost of rental houses is increasing every day due to the increasing population as people move to towns and cities for various reasons. For this reason, the federal government has initiated programs on provision of affordable housing through the Affordable Housing Policy which aims to provide millions of United States citizens with houses they are capable of paying without much struggle. This policy has significant impacts on the citizens as well as the real estate companies as they take initiatives of running the program throughout the country. A good example of a private real estate company that has been experiencing high returns on the provision of affordable housing and housing facilities in the United States is the Summerlin Development in Las Vegas, Nevada. Various factors need to be considered before venturing into the deal to avoid future losses in the real estate field. Despite benefiting the members of the public, the real estate companies need to make profits from the initiated projects. These companies are directly involved in the construction of houses and the provision of land for the project. A major factor to consider as a company is the returns on investment and the viability and sustainability of the project. Different sources as used in this research indicate that the provision of affordable houses in a viable project that needs to be initiated across the country.
The objective of the Research
This research aims at providing a relevant argument on whether the affordable housing policy should continue. The research focuses on the impact of the policy to the citizens as well as how the project is likely to influence the real estate industry. At the end of the research, the paper should be able to define the impacts of affordable housing policy on the housing industry and conclude on whether the federal government should continue with the initiative.
Introduction
The larger population in the United States experiences difficulties in finding a conducive place to live that falls within their budget around the neighborhood they have been living for years. The problem is getting worse over time as the population increases and the house owners continue to increase the cost of renting thus making housing a major challenge in America. Affordable housing is defined with reference to the income of an individual thus defining your ability to pay rent. According to the general rule of thumb, rent should go at most 30 percent of a person’s salary (Madhyam, 2019). However, many people end up spending more than this even up to 50 percent of the salary on the rent due to unavailability of affordable houses especially in towns and urban areas. The formulation and implementation of affordable housing have more significant impacts in providing rental houses to the citizens and relatively lower prices. The policy also has a greater impact on the real estate companies as they target to invest in the project for the provision of affordable houses as discussed herein.
The Canadian Mortgage and Housing Corporation define affordable housing as the provision of houses with a shelter cost of30 percent and below of the before-tax household income (The Rent Seeker Team, 2018). The affordable housing program is designed to help individuals with housing need especially in urban areas where housing is almost always a challenge to the population. Affordable housing policy requires the private, public, and non-profit sectors to combine efforts to enable the provision of affordable houses to the struggling citizens. The federal government is investing in the project through various programs to initiate the provision of affordable houses to all. The passing of the policy targets to eliminate the housing problem in the country while protecting the real estate sector.
Relationship between Urban Growth and Real Estate Industries
Real estate growth is greatly influenced by urban growth. The diversity in urbanization state of any country greatly affects the rate at which real estate is developed. Urban planning is a major factor that the real estate companies used to make decisions on investments especially in housing and land development. Urbanization and growth of cities and towns have indicated significant impacts on population growth which mainly create a continues to need for a housing program to settle the population. The increasing competition for housing facilities in most of the cities in the United States challenges the real estate sector to develop appropriate urban land use to accommodate the house seekers.
The value of real estate properties continues to rise with investors cashing in with real estate investments as the world continues to experience a huge housing deficit, high returns on investments, and various government incentives and continued improvement in infrastructure and social amenities. People will always look for areas with high security, water, and sewerage systems, access roads, government facilities, and public services like education and healthcare institutions. With these factors, real estate investors manage to appreciate the value of urban houses which gives them high returns on investments. When housing facilities are in deficit, the demand increases giving the investors power to dictate housing prices in their favor to increase their rental profit margin. The affordable housing policy is focusing on eliminating this challenge by providing affordable houses for the urban population with quality amenities and social facilities.
The size and scale of real estate are attracting investors in the market with the sector representing a significant portion of investors, especially in urban places. The factors that influence the development of real estate companies include demography, interest rates, economy, and government policies. Increase in population creates a need for more housing thus requiring real estate investors to enhance their investments in the field (Nguyen, 2010). As the population increases, the housing competition increases and house rates hikes thus influencing returns on investments of the investors. The booming economy creates a conducive environment for investing in real estate as a larger population of the working citizens can afford to pay rents and the demand for houses is increasing.
Focusing on affordable housing as a real estate investor, it is essential for investors to channel their resources to the project as a long-term investment program. As the global economy stands, affordable housing is an urgent need for a marginalized population with low income who are mainly living in slums and poor houses. Over 11.4 million employees in the United States live in houses whose rent is over 30 percent of their untaxed income (Kalugina, 2016). This is considered as a major challenge which limits the ordinary citizens from saving as most of the resources are channeled toward rent payment. The United States indicates a shortage of affordable houses in every state and major metropolitan areas with only 35 percent of the available houses can be considered affordable. The government and private investors are therefore required to establish over 7.4 million affordable and available homes to settle the existing housing problem in the United States.
Social and affordable housing is considered as the key sector for investors to make differences in attaining multiple sustainable development goals which include poverty eradication and development of sustainable cities and communities (Principles of Responsible Investment, 2018). Delivering more responsible investments in housing for the people living in sub-standard houses especially in urb...