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  • Eileen Zilch

The Impact of Affordable Housing on Local Economies

Affordable housing is often discussed in the context of social welfare, but its economic benefits are just as significant! 

For Michigan's communities, the work of nonprofits like Community Catalysts, which builds and rehabilitates affordable housing, goes beyond providing a roof over people's heads—it stimulates local economies, creates jobs, and fosters sustainable growth.

Economic Growth and Stability

Investing in affordable housing has a profound impact on local economies. 

In fact, a study by the National Association of Home Builders (NAHB) found that building 100 affordable rental homes generates approximately $11.7 million in local income, $2.2 million in taxes and other revenue for local governments, and 161 local jobs in the first year alone . 

This initial boost is just the beginning; as new residents move into these homes, they spend money on goods and services, further invigorating local businesses and contributing to economic stability.

Job Creation and Workforce Development

The construction of affordable housing creates numerous jobs, both directly and indirectly. 

Beyond the immediate employment of construction workers, architects, and engineers, there are long-term job opportunities in property management, maintenance, and local services. For every dollar spent on housing construction, another $1.30 is generated in additional economic activity, according to the Economic Policy Institute.

This ripple effect means more jobs and greater economic security for the community!

Affordable housing also plays a critical role in workforce development. Stable housing allows residents to pursue and maintain employment, reducing turnover and increasing productivity. 

Employees who have access to affordable housing are less likely to miss work due to housing instability or related stress, which can translate into higher retention rates and a more reliable workforce for local businesses.

Increased Consumer Spending

Affordable housing boosts consumer spending, which is vital for local economies. 

Residents with lower housing costs have more disposable income to spend on necessities like food, healthcare, and education, as well as non-essential items that drive local businesses. 

According to a report by the Joint Center for Housing Studies of Harvard University, families in 

affordable housing spend nearly five times more on healthcare and twice as much on groceries as those who are severely cost-burdened by housing!

Enhanced Property Values

Contrary to some misconceptions, affordable housing can positively impact property values in the surrounding areas. 

Studies have shown that well-designed, well-managed affordable housing can stabilize neighborhoods and lead to increased property values over time. For example, research by the Trulia real estate site found that affordable housing developments have no negative effect on the property values of nearby homes and can even contribute to an uptick in value in some cases.

Attracting and Retaining Talent

Affordable housing is essential for attracting and retaining a diverse workforce, including young professionals, service workers, and entry-level employees who are crucial to the local economy. 

Cities and towns like Livingston County that offer affordable housing options are more attractive to businesses considering relocation or expansion. 

A study by the Urban Land Institute found that 75% of business leaders consider housing availability and affordability when making decisions about where to locate their businesses.

Health and Educational Outcomes

The benefits of affordable housing extend to health and education, both of which have economic implications. Stable housing is linked to better health outcomes, reducing healthcare costs for families and communities. 

Children in stable, affordable housing are more likely to succeed in school, leading to higher graduation rates and better job prospects in the future. 

These improvements contribute to a healthier, more educated workforce, which is vital for long-term economic growth!

Community Revitalization

Lastly, affordable housing can lead to the revitalization of distressed areas. 

By transforming vacant or underutilized properties into vibrant housing communities, projects spearheaded by organizations like Community Catalysts can breathe new life into neighborhoods. 

This revitalization attracts new businesses and residents, creating a positive cycle of investment and growth.

Before You Go...

The impact of affordable housing on local economies is multifaceted and powerful, to say the least! From job creation and increased consumer spending to enhanced property values and improved health and educational outcomes, the benefits are clear. 

Community Catalysts' work in Michigan is not just about building homes; it's about building stronger, more resilient communities.

By continuing to invest in affordable housing, we can secure a brighter economic future for all.


  1. National Association of Home Builders (NAHB), "The Economic Impact of Home Building in a Typical Local Area."

  2. Economic Policy Institute, "The Economic Benefits of Investing in Infrastructure."

  3. Joint Center for Housing Studies of Harvard University, "The State of the Nation’s Housing."

  4. Trulia, "There Doesn’t Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values."

  5. Urban Land Institute, "The Business Case for Affordable Housing."

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