Like bridges and roads, affordable housing is an investment in a community’s infrastructure. Along with numerous social benefits, housing affordability supports diverse jobs and wage levels and also attracts and retains workers – critical to a community’s long-term economic success.
Housing affordability also contributes to a community’s quality of life – increasingly important to businesses. Amazon is a recent example. When outlining preferences for a new HQ2, the organization prioritized “a diversity of housing options” and “the presence and support of a diverse population.”
Here are five ways housing affordability affects the business environment:
1. Contributing to the local economy
Each dollar invested in affordable housing boosts local economies by leveraging public and private resources to add to the community. Building 100 affordable rental homes generates $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, reports Our Homes Our Voices. Affordable rental communities are also a revenue source. For instance, AHC Inc. pays Arlington County millions of dollars each year in real estate taxes, impact fees, business taxes, and other fees.
2. Attracting businesses and increasing tax base
Housing affordability is a critical factor in attracting new employers and helping existing businesses grow. This is important not only for creating jobs, but also for building the region’s tax base so it can fund key services like education, public safety, parks and recreation, and mental health.
3. Reducing recruiting and retention costs
It is impossible for many local employees to afford to live in Arlington. High housing costs cause challenges for recruiting and retaining employees, which increases costs for local businesses, including turnover and absenteeism. Some critical jobs that support the local infrastructure, such as school employees and public safety officers, are particularly hard to recruit and retain.
4. Encouraging community commitment
Diverse housing options promote long-term economic and social integration, while building community. For instance, one quarter of Arlington’s population is between the ages of 25 and 34 – almost twice the national average. The high cost of living in Arlington forces many young professionals to move elsewhere once they begin looking to buy homes and start families.
5. Building stable and successful families
Stable housing contributes immensely to a family’s economic success. Paying less for housing means more is available for other essentials. People who have an affordable home are able to spend 5 times more on healthcare and 3 times more on nutrition, for instance.
Arlington’s Affordability Challenge
In Arlington, our limited geographic footprint and desirable location has steadily eroded the number of affordable places to live. Between 2000 and 2015, the average rent increased by more than 90 percent as condominiums and luxury rental buildings replaced older apartment communities. More than 14,500 affordable rental units were lost. Today, just 8.2 percent of the County’s housing is affordable to households earning up to 60 percent of the area median income (AMI), according to Arlington’s 2017 Affordable Housing Master Plan Report.
For perspective, Arlington’s area median income is $117,000 for a family of four, or $70,320 for a household earning up to 60 percent AMI. Unfortunately, many of the fastest growing jobs in Arlington provide significantly lower wages.
Among the top 10 most needed occupations in Arlington/Alexandria that require some post-secondary education, half provide lower pay: computer support specialists ($61,200), teacher assistants ($33,000), accounting clerks ($46,600), automotive mechanics ($51,700), and dental assistants ($42,800).
Many fast-growing, low-skill job categories provide even lower average wages: janitors and cleaners ($27,500), waiters ($26,200), customer service representatives ($39,600), and office clerks ($38,500).
Businesses Can Help
Despite Arlington County’s strong commitment to providing diverse housing opportunities, the number of affordable living options continues to erode. If our community is to stay vibrant and economically viable, prioritizing housing affordability needs to be a community-wide effort.
Businesses can help by embracing market and policy solutions that improve housing affordability, supporting greater access to affordable housing for their employees, and engaging with local housing groups to support their work.
Housing affordability is a critical building block in Arlington’s future. Providing affordable living opportunities is an investment that will pay off now and for decades to come.