What Is Workforce Housing?
Workforce housing is typically available for households earning between 60% and 120% of the Area Median Income (AMI). It is designed for those whose essential work supports the local economy but whose incomes are not high enough to afford the prevailing market-rate rental or homeownership costs. Workforce housing improves communities in a number of ways. When local employees can live near their workplaces, commutes decrease, civic engagement rises, and local businesses benefit from a stable workforce. Stable housing is economic development. Essential workers—teachers, nurses, retail employees, police officers—provide services that keep a community running smoothly. Attracting and retaining these workers ensures a robust local economy. Workforce housing helps prevent communities from becoming enclaves of only the highest earners or second-home owners, providing diversity that enriches community culture. COMMON CHALLENGES Because it is still below-market in some communities, workforce or middle income housing faces many of the same challenges faced by housing for people of lower incomes. These include: • H igh Development Costs & Limited Land Mountain resort towns and coastal areas often have extremely high land values, high rents, and limited buildable sites. • R estrictive Zoning & Anti-Density Sentiment Zoning laws, reinforced by long-held community beliefs, may limit density, complicating efforts to build the quantity and type of housing units needed. • Community Misconceptions “Affordable housing” can carry a stigma, leading to misunderstandings or resistance from local residents, and businesses. • Infrastructure & Climate Constraints In regions with cold climates and fire/flood zones, building costs rise due to stringent weatherproofing requirements and high insurance costs. Importantly, this type of housing also lacks a dedicated subsidy. Unlike more “traditional” affordable housing for lower income households (such as those earning below 60% AMI), workforce housing is still a relatively new concept in many communities and lacks dedicated sources of subsidy. While Low Income Housing Tax Credits spur millions of dollars of investment in housing for people earning below 60% AMI across the U.S., this large source of funds is not available for projects serving households in the Workforce Housing range. Colorado is the first state to offer Middle Income Housing Tax Credits to help address this funding issue and is also dedicating a substantial portion of state funds to affordable housing for moderate income residents. Other communities are also considering creating dedicated funding sources as housing costs continue to rise.
Workforce housing
helps prevent communities from becoming enclaves of only the highest earners or second-home owners, providing diversity that enriches community culture.
A PRIMER ON WORKFORCE HOUSING • 4
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