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The Hidden Consequences of the Affordable Housing Shortage: Exploring Its Impact on Communities.

Updated: Oct 19, 2023

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The affordable housing shortage is a complex and multifaceted problem that affects millions of Americans and their communities. According to the National Low Income Housing Coalition, there is a shortage of 6.8 million rental homes affordable and available to extremely low-income renters, who earn no more than 30% of their area median income1. This means that for every 100 extremely low-income renter households, there are only 37 affordable and available rental homes1. The lack of affordable housing has many hidden consequences that impact not only individuals and families, but also the economy, the environment, and the social fabric of communities. Some of these consequences are:

  • Increased homelessness: Without affordable housing options, many people are forced to live on the streets, in shelters, or in overcrowded and substandard conditions. Homelessness can have devastating effects on physical and mental health, education, employment, and social relationships2.

  • Lost tax revenue: When people spend a large portion of their income on housing, they have less money to spend on other goods and services, which reduces the tax base for local governments. Additionally, when people are unable to afford housing near their workplaces, they may commute longer distances or relocate to other areas, which can also reduce the tax revenue for the communities they leave behind2.

  • Greater burden on public services: The lack of affordable housing can increase the demand for public services such as health care, education, transportation, and social welfare. For example, people who are housing cost-burdened may have less access to preventive health care and more likely to visit emergency rooms or rely on public health programs2. Similarly, children who experience housing instability or homelessness may have lower academic performance and higher dropout rates than their peers who live in stable and adequate housing2.

  • Less diverse workforce: The lack of affordable housing can limit the ability of workers to access employment opportunities that match their skills and interests. This can result in a mismatch between labor supply and demand, which can reduce productivity and innovation in the economy3. Moreover, the lack of affordable housing can also affect the diversity and inclusion of workers from different backgrounds, cultures, and perspectives, which can enrich the social capital and creativity of communities3.

  • Increased cost for health care: The lack of affordable housing can also have negative impacts on the health outcomes and costs for individuals and society. Research shows that housing affordability is associated with various health indicators such as chronic diseases, mental health disorders, substance abuse, and mortality4. Furthermore, housing affordability can affect the quality of the indoor and outdoor environment, which can influence exposure to pollutants, allergens, pests, noise, and violence4. These factors can increase the risk of illness and injury, as well as the need for medical care and treatment4.

  • Negative environmental impacts: The lack of affordable housing can also contribute to environmental degradation and climate change. When people cannot afford to live near their jobs or public transit options, they may drive longer distances or use less efficient modes of transportation, which can increase greenhouse gas emissions and air pollution2. Additionally, when affordable housing is scarce or inadequate, it may lead to urban sprawl or substandard construction practices, which can consume more land and natural resources, degrade water quality and biodiversity, and increase vulnerability to natural disasters2.

These are some of the hidden consequences of the affordable housing shortage that affect not only individuals and families who struggle to find a decent and affordable place to live, but also the communities they live in. Solving this problem requires a comprehensive and coordinated approach that involves various stakeholders from the public, private, and nonprofit sectors. By investing in affordable housing production and preservation, expanding rental assistance programs, promoting fair housing policies and practices, and supporting community development initiatives, we can create more equitable and sustainable communities for everyone:



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