Affordable Housing

Affordable housing sounds great on paper.  I think everybody would agree that homeownership is a big part of the American dream.  The more people participating in the American Dream the better right.  To facilitate this process the concept of affordable housing was created. 

Affordable housing initatives basically require a certain percentage of new housing stock to be priced at below market rates so a different economic sector of society can live in a particular area.  Once again sounds like a great idea however…

Affordable housing issues exist in the first place due to either a shortage of housing or an overinflated housing market.  Affordable housing initiatives are basically a bandaid for these two larger problems.  Additionally overtime these problems increasingly magnify.  Say the cutoff for affordable housing is 50,000 per year.  For a little while everyone is happy but then people making 60,000 per year can’t afford to buy housing.  So the limit is changed to 60,000.  This pattern continues ad nauseum.  In Fairfax County there are actual discussion about using incomes as high as 100,000 per year to qualify for affordable housing.

So, what should be done instead.  Well there are two basic choices and neither option actually involves government interference  

1. Builders can build more houses to meet the demand for housing in an area


2. People will leave or stop buying in a certain area because it is overpriced.

In the greater Northern Virginia area number 2 is happening  

The main argument to this is that it isn’t fair.  Well guess what life is not fair.    

Do I think it would be neat living in McLean?  Perhaps, but I don’t make enough money to live there.  I could change this by furthering my education or switching job fields.  I also have the option of moving, I could afford a nice house in North Carolina or a mansion in Kansas 🙂  The main point is that people have choices

The bottom line, its not the governments job to ensure people can live where they want to this burden falls on the individual.  Affordable housing initiatives sound nice but create havoc on the free market and over time actually hurt more people than they help by masking housing shortages and/or overinflated prices.                 


~ by novamiddleman on March 8, 2007.

3 Responses to “Affordable Housing”

  1. Unfortunately what your post seems to be missing is an accounting of the effects of just saying “life isn’t fair” – this isn’t just about individuals forced into tough or impossible choices. This actually hurts society at-large. When a person or a family can’t find an affordable, stable, and adequate place to live it has disastrous side effects for a range of policy concerns from transportation to crime to education and a number other issues.

  2. There are always places for people to live. The reality is it might not be a single family home or in an A+ neighborhood. There was an article in the Washington Post today about hispanics leaving Arlington because the cost of living and rents have gone up. These people still have places to live but they can’t live in Arlington.

    Arlington has created some affordable housing options but like I said in the original post these actually hurt people in the longrun. The market won’t adjust and even more people will be displaced.

  3. Dear Middleman,

    I agree with you that people make choices and that not all people can live in all places. You can choose to live near Washington, or you can choose to have a bigger house——–most of us can not choose BOTH!

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