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Making Affordable Housing a Priority

February 23, 2012 | Comments: 0 | Views: 124

Despite lower home prices, the availability of affordable housing remains a concern across the country. While it's true that there are a lot of homes on the market, they are still out of reach for the nation's low-income residents. While home prices have fallen dramatically in the last few years, so have incomes. And rental prices have actually increased. Consequently, affordable housing is still in short supply. The state of Maryland is no exception. In an effort to address the issue in Maryland, its governor, Martin O'Malley, recently announced a new housing initiative.

Called the Rental Housing Works initiative, it allocates $15 million for affordable housing projects in Maryland. The state currently faces a rental housing shortfall of about 127,000 units. This new initiative will fund the building of over 1,700 rental units and will help create or support over 1,000 jobs. In addition, Governor O'Malley estimates that the new housing projects will generate $36 million in taxes for both local and state governments over the 15 years.

Though city and state officials throughout the U.S. are aware of the low-income housing shortage, few have allocated the resources needed to create solutions. Most cities have opted to reduce low-income housing requirements, in hopes of encouraging increased development. While that may result in more housing, it does little to help low-income families. Some states have explored the option of converting foreclosed properties into low-income housing, with marginal success. Still others have proposed changing zoning regulations, including density limitations. Any one of these policy shifts could prove effective, but the fact remains that the best way to address a housing shortage is to build housing.

Maryland currently has a residential development budget of about $15 million, so the new initiative will double the amount of money available for low-income housing-related projects. Rental Housing Works will also act as a stop gap, filling in financial shortfalls that have been left by reductions in federal money.

The governor estimates that about 20 new housing projects will be funded through Rental Housing Works. Some of those projects have been in the planning stages for a while and are shovel-ready. Others, however, haven't yet been selected.

Often, when federal money is made available for construction projects, it spurs private investment as well. Maryland Housing Secretary Raymond Skinner estimates that each $1 the state offers in housing funding prompts over $15 of private investment. Some developers challenge that ratio, and suggest its closer to 5-to-1. Even so, leveraging federal money for private investment ensures that the responsibility for housing development doesn't rest solely on government shoulders.

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Source: EzineArticles
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