Housing as infrastructure: Why prioritizing homes is essential to economic success – Atlanta Business Chronicle

Our growing population coupled with high construction and land costs is making homes scare and unaffordable. There is a national shortage of 3.2 million homes, according to Axios and Census data. Redfin says just 16 percent of for-sale homes were affordable for the median income in 2023, down from 40 percent in 2019. Harvard University found that half of all U.S. renters spent at least a third of their income on rent and utilities alone. We need a growing inventory of all housing types at all income levels to catch up with the demand — and address affordability.

What happens when we think about housing as a kind of infrastructure? We think of infrastructure as roads and bridges, sewers and pipes, electrical grids and power lines, cellular networks and internet cables and even parking lots and schools. Housing rarely makes the list, but like traditional infrastructure, it is part of the fabric of a successful economy. Housing is infrastructure.

Prioritizing housing akin to traditional infrastructure contributes to maintaining quality of life, boosting the economy and contributing to an area’s competitiveness. It creates livelihoods for people to reap the reward of infrastructure investment. Housing and infrastructure share a lot in the way they act to enhance and provide for the environment they serve.

Infrastructure, meet housing.

Infrastructure boosts the economy. Housing boosts the economy.

Increased spending on infrastructure has proven to yield high rates of return time and time again. Its role in stimulating the economy, creating jobs and boosting productivity has kept infrastructure investment at the forefront of the current and recent White House administrations. Take President Joe Biden’s $550 billion Infrastructure Investment and Jobs Act (IIJA), which specifically mentions bridges, mass transit, water infrastructure, resilience and broadband, for example.

Public investment in infrastructure increases GDP. For every $100 spent on infrastructure, private-sector output increases by $13. Public investment in infrastructure creates jobs. All sorts of professions are engaged in infrastructure construction projects. Workers spend their money locally. Public investment in infrastructure also heightens productivity. It increases mobility, communication and connectivity. Imagine a road widening or interchange that alleviates congestion, moving more vehicles at a time through it.

Likewise, building housing boosts the economy. Businesses, which pay property tax, want to open near potential customers. Homeowners, who pay sales tax, want to spend money in their own community. Increased tax revenues allow for local governments to make greater investments in traditional infrastructures. A virtuous circle.

Infrastructure is a long-term investment. Housing is a long-term investment.

Infrastructure projects are long-term investments. The systems are subject to aging and require maintenance and upkeep. Roads eventually need to be repaved. Sewer systems must be cleaned. Climate change, evolving development patterns and human behaviors have altered the minimum requirements of our infrastructure. Heat waves are pushing power grids to their limits. Increased impervious surfaces overwhelm storm drains. Technological advancements create more efficient options to enhance infrastructure performance or sustainability. Infrastructure investments are made by looking forward and planning communities with intention, by assessing all options, weighing cost and return and predicting the way future generations will use it.

Likewise, housing should be built for the longevity of the community it serves. The consequences of underdevelopment and population growth are upon us. The National Low Income Housing Coalition estimates a housing shortage of over 121,000 units in metro Atlanta. The Atlanta Regional Commission reported that between April 2022 and April 2023, the 11 core metropolitan counties gained more than 67,000 new residents. At an average of 2,500 new units being built per year in the same geography, the shortage is only compounding. We must pick up the pace.

Just like traditional infrastructure, housing built today is a long-term investment. With another 1.8 million on their way to metro Atlanta in the next 25 years, the housing needs of our 2050 residents should be considered now.

Infrastructure should be accessible to all. Housing should be accessible to all.

Traditional infrastructure is essential to quality of life. Consider a lack of clean water, power or connectivity. These would devastate a community. When communities are being built or funding is being distributed, adequate infrastructure is a stark non-negotiable to creating a desirable quality of life. Measures are put in place to ensure these investments happen and that they serve all parts of the community. Think about utility assistance initiatives or federal grants for certain neighborhoods.

Likewise, housing should be accessible to all. A graph sourced from the National Association of REALTORS reported that metro Atlanta households with an income of $50K or less make up roughly 40 percent of the population but could afford a mere 4.1% of the housing inventory available in the region.

The ARC reported that home sales prices increased by 49% since 2017 in Atlanta and our metro also ranked fourth highest in rent appreciation last year. Around 148,000 of our neighbors are extremely cost-burdened, spending more than half their income on rent. The 11-county region lost nearly 60,000 units that were renting at less than $1,250 a month in a five-year window prior to the pandemic.

Housing investments need to be prioritized at all income levels. Just as housing is part of the essential fabric of the economy, it is part of the essential fabric of a community.

Moving forward

As housing is a product of private investment, the challenges with building it often come from restrictive zoning or costly requirements. New housing initiatives and reimagined zoning practices are picking up momentum nationally. Across metro Atlanta, policymakers are reviewing zoning codes, exploring accessory dwelling unit ordinances, forging funding partnerships, addressing senior housing and engaging with developers to promote greater supply and affordability.

When we prioritize housing as essential infrastructure, we will see public policy adjust to allow for it. Traditional infrastructures are connections. They connect people to jobs, people to opportunity and people to people. Housing can do all three. Not to mention, whether it’s roads, pipes, wires or networks, all infrastructure either begins or ends at the home.

Join the Council for Quality Growth on Aug. 9, 2024, for the 4th Annual INTERSECTION Quality Development Conference. This half-day program will explore “the intersection” of housing and infrastructure with an exciting line-up of expert speakers and panelist. Each year, The INTERSECTION is place where public policy and private investment meet to discuss metro Atlanta’s critical issues, hear best practices and stay educated on topics as they relate to metro Atlanta’s ability to grow and prosper. The INTERSECTION is a product of the Quality Growth Institute, the Council for Quality Growth’s education arm and an established 501(c)(3) organization. Find out more and register today at www.councilforqualitygrowth.org/INTERSECTION.

The Council for Quality Growth is a trade organization that works to ensure continued growth and economic success for generations to come by providing advocacy, information, and education to its members. For 39 years, the Council has been committed to the mission of promoting balanced and responsible growth and is proactively involved in the formulation of policy and legislation critical to the growth and development industry. The Council addresses, head-on, strategic economic planning, infrastructure needs, and tough quality-of-life issues throughout the metro Atlanta region and state.