Workforce housing is not to be confused with affordable housing. The best definition for workforce housing is “housing that is affordable to households earning 60 to 120 percent of the area median income.” However, that median may vary by state. Unfortunately, major metros still struggle with filling the gaps with workforce housing programs.
Recently, housing prices have outpaced income in many major metros around the U.S., causing a housing shortage for those trying to find affordable housing close to their work. The housing crisis has been discussed extensively by politicians and economists alike. From connecting investors with developers to partnerships between building owners and tenants, creative programs can help combat the workforce housing shortage in major metros. Let's look at some of the solutions that experts feel can help keep the workforce housing shortage under control.
1. Leverage technology that helps developers build faster for less
New construction technologies and structural frames may be the answer to building better and faster. Innovative materials may also prove to be more affordable without sacrificing durability and quality.
2. Remove administrative and regulatory barriers that make it challenging to build more homes and apartments cost-effectively
A good place to start would be automating the local, state, and federal systems that analyze the planning and zoning codes and reducing processing time. If the processing of legal analysis could be shortened from months to weeks or days, less time and money would be wasted waiting on whether housing can be built on a particular property.
3. Provide flexible financing terms so more people can qualify for a mortgage
Create programs that help renters improve their financial positions so they can achieve homeownership. Banks and lenders need to create better mortgage products that are easier to qualify for while also affordable. Rent-to-own programs seem to be an effective solution for both the property owner and tenant; the property owner collects rent while the tenant feels less burdened knowing that each rental payment goes towards a downpayment and option to own the property someday.
4. Better utilize existing housing and land
Existing housing and land can be transformed into creative communities that attract like-minded lifestyles. An example would be co-living communities designed for workers from the same company or industry.
5. Create opportunities for investment in workforce housing developments
The workforce housing shortage manifests opportunities for investment in housing development. The market demand for this sort of housing will continue to rise as millions of working Americans are unable to purchase a house, particularly those who don't qualify for government housing and can't afford new construction.
When it comes to the workforce housing sector, there is a far more extensive range of products and services available than in affordable housing. Compared to affordable housing, developing workforce housing also comes with fewer regulations. Workforce housing developments can fill the gaps between the government housing system and the free market.