No More Mixed Feelings on Mixed-Use Areas

The battle between the ever-shrinking housing supply in the United States against the rapidly increasing number of buyers has led to home prices rising. Adding this to the smaller land supply makes the already undesirable situation for those living in the country’s urban centers much worse.

Affordability Is Still an Issue

The JCHS State of the Nation’s Housing report shows that the price-to-income ratio puts the least affordable metros in the country in major urban region such as Southern California, South Florida, and the New York-Jersey City area. Prospective urban dwellers are struggling now more than ever to find housing they can afford, pointing to a clear problem that has serious economic implications. High urban housing costs restrict people from a more promising job market and with the current struggle millennials are having fitting into the workforce, affordability faces a serious obstacle.

The Light at The End of the Tunnel

Following a recent trend in rezoning laws, a new proposal has risen in Broward County, FL, allowing developers to build homes in commercial and business areas if they meet two conditions: these areas are located near the county’s busiest roads and that some of the new residences are reserved for affordable housing. If the developer cannot guarantee some of the houses will be affordable then they have the option of contributing to a county trust fund that would then subsidize affordable housing projects. The goal of the proposal is to expand the housing supply to drive prices down, something desperately needed given the unprecedented market conditions. As reported by the Broward Housing Council, there is a housing shortage of 42,000 affordable units for moderate income owners and renters within Broward County. Furthermore, it is estimated that the country’s current housing production rate is 300,000 residential units below the national demand, putting supply at a precariously low position.

Proposals like these that use mixed-use areas open the possibility to counter the high costs that plague the nation. Creating an opportunity to build additional housing units in already occupied business areas, without having to develop new land, is a cheaper alternative for developers. In addition, the proposal doesn’t have to deal with the issue of land shortage and high raw land costs. Moreover, additional accessible urban areas can give the 4.4 million underemployed Americans a greater access to a better job market with, higher paying, full time jobs. The availability of a quality job market would help the growing millennial-led workforce find better jobs, helping to sustain a thriving economy. Initiatives to build lower cost housing can help accommodate the 3.4 million millennials that currently do not have a home and accommodate the future 2.9 million increase in households over the next decade. Creating housing projects within business centers is one solution since there would be a higher supply but also because an urban location with lower costs seems more attractive to a generation with staggering student debt and hipster lifestyle.

Money isn’t Everything

Additional housing in and around business centers may also appeal to senior citizens. The convenience of not having to drive a car and accessibility to various amenities adds utility that senior citizens can’t put a price on. Additionally, the reduction in automobiles will lead to less congestion and less hydrocarbon emissions. Any intention to increase the housing supply is more than welcome, especially when it addresses other issues cities have in the process. Increasing the housing supply is not only important for the sake of the current housing market but also to aid those Americans who are struggling with the economy despite the success of many others.

The need to make the housing market more affordable is clearly an idea whose time has finally come.

From the trenches,

Roy Oppenheim