By: Nancy Marie 

Affordable housing is one of the debated issues in real estate and urban planning. While the social benefits are apparent stability, improved quality of life, and stronger communities, the economics behind delivering affordable housing are far more complex. Dr. Connor Robertson, a real estate strategist with extensive experience in sustainable housing solutions, believes that understanding the financial realities is essential for creating lasting affordability. His approach combines market analysis, creative financing, and a focus on aligning incentives for both developers and the communities they serve.

Why Affordable Housing Is Expensive to Build

One of the paradoxes of affordable housing is that it often costs nearly as much to build as market-rate housing. Land prices, labor costs, and materials don’t automatically become cheaper just because a project is designed for lower-income residents.

Dr. Robertson notes that urban land is often the single largest expense, especially in cities where demand is high and space is limited. Construction costs have also risen in recent years due to supply chain disruptions and skilled labor shortages.

“Affordability doesn’t mean low quality,” he explains. “The challenge is delivering housing that meets safety and livability standards while keeping prices in reach for the people who need it most.”

The Role of Financing in Affordability

Financing plays a critical role in making affordable housing projects viable. Traditional lending models favor market-rate developments that offer higher returns, which makes it harder for affordable housing projects to secure funding.

To bridge this gap, Dr. Robertson often looks to layered financing strategies that combine multiple sources of capital, including:

• Low-Income Housing Tax Credits (LIHTC) to offset development costs.
• Public subsidies from local, state, or federal programs.
• Private investment from socially minded investors.
• Philanthropic contributions targeted toward housing access.

By blending these sources, developers can reduce their reliance on high-interest debt and improve project feasibility.

Public-Private Partnerships as a Solution

Public-private partnerships (PPPs) are another powerful tool for delivering affordable housing. In these arrangements, government agencies work with private developers to share risks, costs, and benefits.

For example, a city might provide land at reduced cost or offer tax abatements in exchange for a developer setting aside a certain percentage of units as affordable. These partnerships can accelerate development timelines and create projects that would not be possible in the private sector alone.

Dr. Robertson emphasizes that PPPs work ideally when roles and expectations are clearly defined from the outset. “The most successful partnerships align incentives so that both sides benefit from the project’s success,” he says.

The Supply and Demand Equation

At its core, housing affordability is a matter of supply and demand. When the number of units available at affordable price points is too low, competition drives prices upward.

Increasing supply, whether through new construction, adaptive reuse of existing buildings, or conversion of underused spaces, is essential for easing market pressures. However, Dr. Robertson cautions that simply building more units is not enough. “We have to build the right kinds of units in the right locations, with the right mix of price points,” he explains.

Operating Costs and Long-Term Affordability

Even after a property is built, affordability can be eroded over time by rising operating costs. Utilities, maintenance, property taxes, and insurance can all increase faster than incomes, putting pressure on residents.

To address this, Dr. Robertson recommends incorporating cost-saving measures into the design phase, such as:

• Energy-efficient systems that reduce utility bills.
• Durable materials that lower maintenance expenses.
• Shared amenities that deliver value without excessive upkeep.
• Keeping operating costs in check helps ensure that units remain affordable in the long term, not just when they first open.

Economic Benefits of Affordable Housing

Affordable housing doesn’t just benefit the people who live in it; it strengthens the broader economy. Residents with lower housing costs have more disposable income to spend on goods and services, supporting local businesses and creating jobs.

Stable housing can also reduce public expenditures in other areas. For example, it can lower healthcare costs by reducing stress-related illnesses and improve educational outcomes for children by minimizing school disruptions.

Dr. Robertson views these ripple effects as essential to making the economic case for affordable housing. “When we invest in affordability, we’re investing in the long-term health of the economy,” he says.

Balancing Profitability and Accessibility

For developers, the challenge is creating projects that are financially viable while serving lower-income residents. This balance often comes down to innovative design, efficient use of resources, and securing the right mix of funding sources.

Mixed-income developments, where market-rate and affordable units coexist, can help achieve this balance. The revenue from market-rate units can subsidize the affordable ones, while residents benefit from living in economically diverse communities.

Looking Ahead

The economics of affordable housing will continue to evolve as cities explore new policies, financing tools, and design approaches. Dr. Connor Robertson believes that success will depend on collaboration between the public and private sectors, along with a willingness to think beyond traditional development models.

“The solutions aren’t going to come from one side alone,” he says. “It’s going to take cooperation, innovation, and a shared commitment to making housing accessible for everyone.”

For more on Dr. Robertson’s work and perspective, visit www.drconnorrobertson.com.

Disclaimer: The views expressed in this article are those of Dr. Connor Robertson and do not necessarily reflect those of any specific organization or entity. The information provided is intended to highlight general strategies and approaches to affordable housing development. Results and feasibility may vary depending on specific circumstances, location, and market conditions. Always consult with professionals before making any investment or development decisions. The mention of financing strategies, public-private partnerships, or tax incentives is for informational purposes and should not be construed as guarantees of availability or applicability in all markets.