Mixed-income housing: a tool for a more inclusive community
Business model showing promise for developers and neighborhoods
Developers and community officials are embracing a new tool to address the affordable housing squeeze: mixed-income housing. As supply continues to fall short of demand for affordable housing space, officials are hoping this innovative approach can offer a promising investment for developers while providing housing that mixes affordable units and market-rate rentals. Large cities like Chicago, the Twin Cities metro area and New York City have been exploring the potential for mixed-income housing, and developers have launched projects in these urban areas. But the idea is now gaining a foothold in smaller communities that also face an affordable housing shortage.
A viable solution for improved diversity and inclusion
Mixed-income developments are also catching on in more affluent regions. The business model, which blends people of different income groups, shows promise to reduce economic and racial segregation and improve diversity, equity, and inclusion in communities.
The U.S. Department of Housing and Urban Development says that poverty in low-income housing communities is tied to significant social problems, including crime. On the other hand, less economically segregated communities that provide ample housing for low- and middle-income families result in better outcomes for children. Those outcomes include more education and higher earning power as adults — yielding a potential long-term benefit to neighborhoods and upcoming generations. Placing lower-income families with those of higher incomes provides improved access to education, opportunities and social stability.
For developers interested in supporting the revitalization of communities along with diversity and inclusion, mixed-income housing may be worth exploring. Creative funding sources exist for affordable housing projects, and mixed-income housing developments may qualify for tax credit programs, tax-exempt bonds, local housing agency funds and other incentives, such as relief from development requirements. Of course, generating an income is essential for private investors and developers, and innovative financing solutions can help make mixed-income housing a more viable endeavor with far-reaching benefits for the community and the families that call it home.
Challenges to mixed-income housing developments
Developers who are not used to the requirements of mixed-income regulations associated with federal funding may find them to be daunting. The regulatory burden and the cost of land and commercial construction overall can prove to be barriers to entry. Some have cited declining government subsidies as a barrier to development as well. Of course, the potential ROI on integrated, mixed-income housing depends on a wide variety of factors, including the local housing market. You’ll need to analyze the feasibility of your project to determine whether a mixed-income housing development is right for you.
Looking for design-build firms near me for your mixed-income housing development?
Partnering with the right team of commercial building contractors and design-build project experts is key to mixed-income housing development success. Whether you’re searching for design-build firms near me, general contractors in La Crosse, Wisconsin, construction companies in Rochester, Minnesota, we can help. Contact us to see how the design and build model of construction can make all the difference in your next mixed-income housing development.