Tag Archives: Hopkins Institute for Policy Studies

The True Cost of Not Providing Affordable Housing

screen shot for blog

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