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There is no doubt about the critical need for affordable housing in America today. Affordable housing allows families to have a stable home, offering countless benefits to children by helping families stay connected to the communities they choose where they have found medical care, churches and schools. Stability helps keep families together.
However, there is another benefit of providing affordable housing: it becomes a pathway to homeownership, a way to build financial security.
Members of the National Real Estate Investors Association (National REIA) work every day to improve neighborhoods, one home at a time, doing our part to help provide safe, affordable housing to Americans at all income levels. Whether it is rehabbing an older distressed home or providing rental housing, our members are on the front lines of this important issue.
However, there are some concerns about housing in general that need addressed. Well-intended regulations often drive up the costs of rehabbing older housing and building new housing. In some areas the opportunity for developing affordable housing is so diminished it is non-existent.
What little housing is built tends to be higher-end where the profit-margins are greater, and the costs more easily recouped. Often this creates a disincentive to develop affordable housing.
With the best of intentions, lawmakers often respond to the lack of affordable housing by passing more laws and regulations. Each new law starts the cycle of unintended consequences.
Role of Real Estate Investors
In reality, America actually has a huge supply of affordable housing, though much of it is in rough shape.
That’s where investors can play a vital role. In many communities across the country, deferred property maintenance has taken a heavy toll – especially on older homes. Whether it was because of neglect or a lack of resources from the owner, a lot of homes are in dire need of rehabilitation.
This causes legislative knee-jerking in the form of punitive property maintenance codes and regulations.