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Are incentives the key to solving the affordable housing crisis?

11/03/2017

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Ipsos’ quarterly research series “What The Future” (WTF) found that homeownership is still firmly a part of the American dream, but economic factors such as crippling student loan debt and booming home prices are making it hard to become a homeowner. If these issues aren’t resolved, Ipsos wonders if aspiring buyers will simply give up.

NAR Chief Economist Lawrence Yun asked Ipsos to dig into what could be done to solve the affordable housing crisis, namely through resident incentives that would garner community support for affordable housing structures.

Ipsos, which dedicated its first-ever issue to housing and the demographic, economic and technological trends that will shape the market’s future, noted lack of community support as a large barrier to the development of lower and mixed-income housing communities which could bolster homeownership rates for millennials, communities of color and low-income households.

“Historically, it’s the existing residents who have the power through the ballot box and the local land-use regulations. Often it is the NIMBYism that has won out,” Yun said. “The conversation has to be changed. The existing local residents can’t have this major veto power. This is the one way to have the conversation about building homes because building is needed.”

“Americans are facing a housing shortage in many markets so they fact that people are at least willing to discuss Y(es)MBYism I think is a very good start,” he added.

Yun suggests offering incentives, such as a gift card or a property tax break, could be the turning point for many communities that desperately need affordable housing.

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Ipsos asked 2,031 adults whether they would support the construction of a large development with apartments and condos along with a restaurant and a gym if said construction took place near their current home.

Forty-three percent of survey takers said they’d strongly or somewhat favor it, while 19 percent would somewhat or strongly oppose it. Thirty-four percent said they felt neutral about it.

But when incentives, such as an Amazon gift card valued up to $500, a new park near the development and their home or a 2-to-5 year cut on their property taxes were offered, survey takers were more likely to support the development.

The support for the development jumped 15 percentage points when survey takers were hypothetically offered a $500 Amazon gift card, and the chance to get a 5-year cut in property taxes garnered a 10 percentage point increase in support.

The promise of a large park made support jump three percentage points, but not as many people budged at the promise of a free gym membership or 25 percent restaurant discount wasn’t there. Still, some did.

Yun said he was surprised that people said they would be willing to support the development in exchange for relatively low reward amounts, but that gives him hope that residents in a real-life situation would react the same way.

“I think we’ll need greater dialogue. We need to be asking the question more,” he said. “It brings greater dialogue and makes people think in terms of trade-offs greater than just simple ‘yes’ or and ‘no.’ ”

Read the full study here.

Email Marian McPherson.

Source: click here

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