The True Cost of Not Providing Affordable Housing

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What happens when a family can’t find affordable housing? Sandra J. Newman, director of the John’s Hopkins Institute for Policy Studies, recently conducted a study (published in the Journal of Housing Economics) to determine the “impacts of affordable housing on the well-being of children.”  In the study, Newman posits that a family should spend roughly 30 percent of their income on housing–no more, but also no less. This ratio is much more difficult to keep for low-income families. Last year, the International Business Times released a report detailing the expenditures of low-income, average, and wealthy American households. Their report finds that the average income for a low-income family in 2013 was $17,563 and that they spent roughly $10,000 of that income on housing. For every dollar a low-income family spent on housing in 2013, they only spent $0.03 on education.

Lack of affordable housing options for families creates other, less obvious costs. When families are forced to spend more on housing and necessities such as food and transportation, educational expenses – for field trips, books, computers and other learning aids — are no longer affordable. Newman believes that providing such educational opportunities is essential to cognitive development.  Newman’s research showed that when families transitioned to spending 30 percent of their income on housing, they spent $98 more on the enrichment of their children.

But lowering cost burdens isn’t enough. Affordable rental housing also needs be built in safe, decent and healthy neighborhoods. In an interview with John’s Hopkins University, Newman said, “the markedly poorer performance of children in families with extremely low housing cost burdens undercuts the housing policy assumption that a lower housing cost burden is always best. Rather than finding a bargain in a good neighborhood, they’re living in low-quality housing with spillover effects on their children’s development.”

These studies underline the importance of providing decent, safe, affordable rental housing to all, and what is at stake when we fail to do so. The burden placed on low-income families should never be reflected in the development of their children; having a roof over your head should never come at the cost of a child’s education.

By: Gabby Richards, NAHRO Public Affairs Intern

3 thoughts on “The True Cost of Not Providing Affordable Housing

  1. Conlon Park

    The article’s mistake is to fail to recognize that families, low income or not, are not required to spend a penny on their kids education. It’s free through the public school system. It’s already paid for by the taxpayers. It also makes the mistake to believe that parents will spend the additional disposable income on their kids education but it could be reasonably argued that the extra money is more likely to be spent on booze, drugs, cigarettes, eating out, vacations, iphones and on and on. Instead of paying for more housing, why not just pay for the field trips or books that the child needs. The article never explains what it means by “$98 more on the enrichment of their children.” But even without explanation, the taxpayers hand the family thousands of dollars in housing subsidies and the kid gets 98 bucks. Big deal. Good luck kid. Perhaps making the parent become more responsible for their own kid would make the parent think more carefully before having more kids.

    1. johnberk

      I think that before bashing this good and insightful article, you should deal with your own prejudices. In the majority of cases, people are born poor, live poor, and die poor. Thus we can consider it an inherent social condition for many. The fact they spend money on other stuff than you does not mean that they are guilty of making bad decisions. Maybe they did not receive sufficient information, maybe they are not educated in maths, maybe they struggle every day to provide food for their kids, leaving them for whole days alone and in company of a TV. Is it their fault? Or is it the current socioeconomic system, with its inequality and lack of opportunities that creates such an environment. Instead of thinking how stupid poor people are, you should think about some way how to help them. Affordable housing is one of many ways how you can do that.

  2. betseymartens

    As a practitioner, I applaud folks who are doing this kind of research. We know that what she is saying is true, but we high fidelity data like this to make our case. Thanks for posting.


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