Study finds affordable home development fuels economic gains

Published on June 28, 2010

A new study commissioned by Local Initiatives Support Corporation (LISC) and Enterprise Community Partners (Enterprise) shows how developing affordable homes can expand neighborhood spending power, raise surrounding property values and help low-income families stabilize their economic outlook. Enterprise and LISC released this report based on data analysis done by the Furman Center for Real Estate and Urban Policy at New York University and independent consultants. In particular, the study considered the impact that new and rehabbed low-income homes have on residents and the communities in which the homes are built.

There were three clear conclusions from the study:

• Family financial stability: Families living in affordable homes more than double their discretionary income, allowing them to pay for health care, pay down debt or save.

• Increased local purchasing power: Affordable homes boost business for nearby merchants. By paying rent within their means, residents expanded estimated local purchasing power by more than one-third.

• Higher property values: Adjacent property values increased and helped generate additional property tax revenue. More specifically, the affordable homes studied increased the value of surrounding properties by 6 percentage points right away and resulted in consistent increases over time.

To read the complete study, download the pdf.