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Balancing trade offs between the quantity, quality, and location of affordable housing
Local jurisdictions face many challenges when deciding how to allocate scarce resources for the creation of new affordable housing. The decision of whether to accept a smaller number of affordable housing units in exchange for better-located and/or higher-quality units is often controversial and difficult to weigh. This brief provides guidance for communities facing these trade-offs.
Factors driving the cost of development
A variety of factors contribute to the cost of new single-family and multifamily homes. Many of these factors fall within the broad category of housing “quality”—that is, the combination of features that make a house or apartment building a safe, comfortable, and well-functioning place to live. Key determinants of housing quality that affect cost include the type of building materials used, particularly for major components like roofing, windows and doors, and siding, the level of interior and exterior finishes, the size of the unit(s), and the availability of amenities, such as a computer room or fitness center. The location of the development is the other major factor that drives costs and is reflected in the price of the land.
For affordable and market-rate homes alike, decisions about housing quality and location can result in substantial variation in project costs, even within the same jurisdiction. For example, homes built with triple-pane windows, ample insulation, and other energy-efficient upgrades typically have higher upfront costs than homes built to comply with minimum building codeA set of rules established by a government agency that specifies design, building procedures, and construction details. requirements. Similarly, the cost of land in neighborhoods with high-performing schools, low crime rates, and other sought-after features will generally raise per-unit development costs compared to building sites that can be acquired at less expense.
Quality and durability raise upfront costs
The relative costs of preservation and land
Other factors for cities, towns, and counties to consider when deciding how to balance quality, quantity, and location of affordable housing include:
- In addition to upfront and long-term costs, the quality of construction and building materials may affect the safety and well-being of occupants. Well-constructed homes built with nontoxic materials provide a healthy and comfortable living environment, helping to reduce the risk that residents will suffer from asthma, headaches, and other serious health issues as a result of their housing. (See the related brief on Improving health of children and adults). High-quality construction is also more likely to withstand a natural disaster intact. (See the related brief on Enhancing resilience to flooding and other climate-related threats for more.)
- Local jurisdictions should also pay attention to design standards. Good design may lessen neighborhood opposition to affordable and higher-density housing, making it easier to create opportunities in amenity-rich areas.
- Some neighborhoods have certain key attributes of resource-rich areas without other amenities that drive up prices. These areas may be ripe for the development of affordable housing for specific populations. For example, neighborhoods with strong transit connectivity and access to medical care but poor quality schools may be good candidates for creation of affordable housing for seniors.
- Proposed affordable housing developments located outside of resource-rich areas may be easier to realize for reasons that go beyond project costs. For example, other neighborhoods may have more favorable land use policies already in place, or residents who are less likely to oppose proposed developments.
 Ackerman, Frank and Rachel Massey. The Economics of Phasing Out PVC. December 2003 (revised May 2006), Global Development and Environment Institute at Tufts University.
 NAHB Model Green Home Building Guidelines. 2006, National Association of Home Builders.
 See, for example, Turner, Margery Austin, Austin Nichols, and Jennifer Comey. Benefits of Living in High-Opportunity Neighborhoods: Insights from the Moving to Opportunity Demonstration. September 2012. Urban Institute.
 Chetty, Raj, Hendren, Nathaniel, and Lawrence F. Katz. “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment.” American Economic Review 2016, 106(4): 855-902.