Spotlight Exclusives

Community Is Key in Expanding Housing Opportunity

Kevin Corinth, American Enterprise Institute Kevin Corinth, American Enterprise Institute, posted on

Where you live matters. According to a recent study, low-income children who move to high opportunity neighborhoods have 31 percent higher incomes as adults. Unfortunately, our housing policies have placed high opportunity areas out of reach for low-income households. Overly burdensome regulation drives up rents and keeps lower-income families out of areas with ample employment and quality schools.

Solving the opportunity problem in America therefore depends on solving the housing problem. Much attention has rightly focused on increasing the supply of housing by crafting less restrictive land use policies. But when it comes to ensuring lower-income tenants are able to take full advantage of opportunity, economical housing may need to be paired with a strong, uplifting community.

That is the approach one Florida housing developer is taking in areas where job opportunities are increasing but so are rents. With relief from density restrictions, parking space requirements, and other ordinances that drive up housing costs, the developer is able to offer modest apartments at well below market rates. Units range from converted motel rooms to modest two bedroom apartments and are affordable for low-wage workers and their families without government subsidies.

I argue in a recent report that strong communities are a major reason for the success of these economical apartments in promoting opportunity. Offering below market rents for modest units allows property owners to provide housing opportunities to tenants who may be screened out of existing housing options. That includes people with lower incomes, spotted employment records, and troubled histories.

However, accepting a larger pool of prospective tenants is only half the battle. Their continued success in staying housed and taking advantage of greater opportunity relies on a strong community.

In the housing developments analyzed in the case study, property managers play a big role in fostering community. One basic function is to provide a safe environment for all tenants. Property managers quickly crack down on minor infractions that could spiral into larger issues and maintain a positive relationship with the police.

But property managers can do much more than simply preserve safety. For example, they can reach out to tenants when they aren’t showing up to work. They can offer support in connecting tenants to new jobs. And they can share in the ups and downs experienced by tenants with limited social ties. As one property manager put it, she treats tenants like family.

The upshot of all this is a platform for opportunity for lower-income Americans who would otherwise be shut out. Economical rents allow more households to cover housing costs and still pay for other necessities. Close proximity to jobs provides an opportunity to move up the economic ladder. And a strong community helps ensure that tenants will take full advantage of that opportunity.

The good news is that economical rental housing does not cost taxpayers anything. The developer in Florida does not take government subsidies and still makes a profit. But cooperation with local governments is imperative. Without loosening regulations, costs could not be brought down enough to keep rents affordable to lower income working households.

Therein lies the challenge. Local governments can be hesitant to ease restrictions on building more densely or more cheaply because existing residents worry about declining home values or undesirable effects on their neighborhoods. Pointing to research that these fears are often unfounded is not usually enough to change people’s minds.

In the case of the Florida developer, however, a reputation for building strong communities has helped overcome these so-called NIMBY (not-in-my-backyard) concerns. At a public hearing about easing restrictions for this latest project, 29 out of 30 witnesses voiced their support. That group included existing tenants, police officers, and neighbors of developments who found them to be assets to their neighborhoods.

This should serve as an example of what’s possible when we come together to break down unfair obstacles to opportunity. When strong community is paired with efforts to increase the housing supply for lower-income Americans, progress is achievable. And as a result, we can become a more inclusive and more productive society where everyone is valued.

Kevin Corinth is a research fellow at the American Enterprise Institute.

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