Housing and the community

Posted 2009-08-19 00:00 under housing, society

Have been discussing the world of community housing with a colleague, and we realized the intricate linkages between affordable housing and the health of the community. Big policy as well as economic implications in this. Here is a diagram that tells the story:

Note that on the diagram, items in boldface are under the control of government or housing associations, and arrows represent influence (e.g., "contruction increases the amount of housing available").

The diagram has two feedback loops. On the left is a balancing loop (A), which reflects how affordable housing makes it possible for "key workers" (essential workers who may receive a lower income, such as teachers, child minders, and nurses) to live locally, making the area more attractive; however, this increased attractiveness tends to increase housing prices, driving out key workers.

On the right (B) is the basic balancing loop of supply and demand: high prices attract construction, which increases supply, driving down prices again.

So on their own, attractive housing markets tend to drive out the people need to maintain an attractive lifestyle, but high prices will attract new construction, which could provide affordable housing.

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