Arkansas Citizens Need of Affordable Housing Now
When it comes to the cost of housing, Little Rock is one of the most affordable cities in the country: The average home value in America is $272,446, whereas the average home value in Little Rock is roughly $160,362. However, that doesn’t mean there aren’t Little Rock residents who are in need of affordable housing. In fact, recent Census data suggests that up to ~46% of Little Rock renters are cost-burdened, or spend more than 30% of their income on housing costs. That’s why the U.S. Department of Housing and Development has allocated $10 million to support Little Rock's affordable housing initiatives.
How the HUD Money Will Be Used
The U.S. Department of Housing and Urban Development requires an action plan for each year that the city receives funding, so Little Rock's Department of Housing and Neighborhood Programs is currently seeking the public’s opinion on how to best spend the money. The survey, which continues through the end of May 2021, covers topics such as serving middle-to-low income families and community needs, like childcare, recreation, homeless shelters, and infrastructure improvements.
The Relationship Between Fair Housing and Affordable Housing
While the Fair Housing Act of 1968 made discrimination based on race, religion, national origin, sex, (and as amended) handicap, and family status illegal roughly 53 years ago, the negative economic consequences of the racially charged policies and attitudes that preceded the Civil Rights Movement still exist today, including in Little Rock.
“African American families that were prohibited from buying homes in the suburbs in the 1940s and ‘50s, and even into the 1960s, by the Federal Housing Administration gained none of the equity appreciation that Whites gained,” Richard Rothstein, a Distinguished Fellow of the Economic Policy Institute and a Senior Fellow (emeritus) at the Thurgood Marshall Institute of the NAACP Legal Defense Fund said in his film, Segregated by Design.
Many families of color, especially in the Little Rock metro area which is roughly 42% Black, continue to be affected by these policies as they prohibited the opportunity to build multi-generational wealth and financial freedoms — like being able to borrow against a home’s equity to start a business or fund college education — that investing in real estate can provide.
That’s why affordable housing isn’t specifically racially focused, but rather the issue disproportionally affects communities of color who are still impacted by pre-Fair-Housing policies that many older folks still remember. After all, someone born in the year 1950 would have been 18 years old when the Civil Rights Act was passed and roughly 71 years old today.
Why Affordable Housing Is Good for the Little Rock Economy
The “30% rule” has long been accepted as prudent financial practice. If Little Rock residents can adhere to it, whether by paying less for housing, increasing their wages, or both, they’re better able to weather financial downturns, avoid evictions (real estate investors will appreciate that), spend money locally, and save for the future — likely to purchase a house — which is obtainable in Little Rock.
Furthermore, access to housing helps people live healthier lifestyles, which helps them stay in the workforce and reduces the chances of developing costly chronic medical conditions that often end in dire financial hardship.
Lastly, the development or improvement of affordable housing creates local construction and building maintenance jobs while inviting infrastructure improvements to access the new properties, resulting in more economic growth.
Affordable Housing: It’s Not Just an Arkansas Issue
Real estate might seem hot in Arkansas, but the truth is, real estate is in demand across America. Even before COVID-19 struck, there was a national housing shortage of roughly 2.5 million units. Today, it’s even more competitive. Both inventory and interest rates are eclipsing a 40-year low, which has caused a 16% jump in the median home value nationwide.
"We are simply facing a housing shortage, a major housing shortage. We need to build more homes. Supply is critical in the current environment," Lawrence Yun, the chief economist at the National Association of REALTORS® told NPR.
That has some lawmakers getting creative. According to a Curbed.com article, the city of Denver — which has become notorious for its mile-high rents and cost of living — has created a revolving loan fund to help deliver affordable housing subsidies while solving some vacancy issues. Perhaps something similar will make its way to Little Rock.
However, all of this newly realized value means a lot of people might be looking to upgrade too. The only question that remains is: Are you ready to help them? If you or someone you know is passionate about the issue of affordable housing, consider donating or becoming a member of the National Low Income Housing Initiative.
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