Although the recent decline in residential housing values has resulted in more affordable housing, most low and moderate income households are still priced out of the homeownership market, particularly in more expensive housing markets such as the Los Angeles metro area.
New home builders that were caught in the housing downturn are simply not willing to drop their prices to meet the market, and have stopped selling homes until values recover. Typical foreclosure properties have significant deferred maintenance and repair requirements, and low or moderate income buyers are unable to cover the costs of repairing or renovating the distressed properties. As a result, families who provide the employment backbone of local economies working as teachers, firefighters, service employees, etc., are finding little or no opportunity to purchase homes in the current marketplace.
This situation can change when the public and private sectors come together. For example, working together, municipal leaders can promote affordable housing in their communities by offering subsidies to prospective buyers, political leaders can approve these projects, and the development community can complete projects that have been on the back-burner. These efforts can go a long way to ensure that working households are able to purchase their first homes, and to live within the communities where they work.
While states and many cities are facing financial difficulties, there must be a strong commitment to investing in for-sale housing opportunities for their lower income constituency. New construction will stimulate local economies as more homes become available to various income levels, and this can result in healthier, more vibrant communities.
Steve Roberts is Vice President of Community Dynamics, Inc. He can be reached at: firstname.lastname@example.org