Community Hope, in partnership with private developer Peabody Properties in Parsippany, New Jersey has been awarded conditional approval by the Veterans Administration to develop Valley Brook Village. This “veterans village” will consist of 63 units of apartments and townhouses for homeless veterans and those at-risk of homelessness as a result of post-traumatic stress, traumatic brain injury and physical disabilities incurred in combat (Community Hope, 2011). The development is planned for 9 acres of land on the Lyons VA facility in New Jersey. There are also a number of cities around the nation who have plans for land use development of veteran villages around VA facilities including Edward Hines in Maywood, west of Chicago.

A reasonable question regarding housing developments such as Valley Brook and the one proposed at Hines is, what is the economic impact? One way to find out is by using an economic impact analysis. Economic impact analysis predicts how an initial change to to an economic event will impact the greater economy (Tuck, 2008). For example, say the current demand for affordable housing is at an all time high–which it is! Thus, the increase in the construction of affordable housing affects the demand and supply for materials to build the home, labor of contractors and architects, and electricians, among other needed labor and materials. This process continues and what is known as the “ripple” effect started by the increase in the construction of homes continue as well. Tuck further explains that the sum of the ripple effects related to an increased demand for supplies is called the “indirect” effect. Thus, the initial effect, plus the indirect and induced (sum of ripples associated with spending by the laborers building the house), added together produce the total economic effect. It is not hard to see that the total effect is positive even in its most simplest form.

So, another good question might be–then why are we not building more affordable housing for veterans and everyone else if they are economically sound? The reasons vary, but answers are rooted in high prices for land, impact fees, zoning requirements and pricy carrying costs. Pair this with community residents and groups who assume that affordable housing equals a myriad of negative impacts including increased traffic and subsequent demise of a community and continously, demand far exceeds supply. Low Income HousingTax Credits (LIHTC) offered to developers have been 90% successful in helping to increase the supply of affordable housing when used, however it’s become almost impossible to find willing developers who will use tax credits because they are complex and require inordinant amounts of time to acquire.

Yes, affordable housing is in huge demand for our veterans and low-income citizens alike, but building these units is not as easy as it might seem. Innovative approaches to getting the developments constructed include possibly blending affordable and market-rate units, combining rentals and homeownership in the same complex, using energy efficient features, creating opportunities for partnerships with nonprofit organizations and of course creative financing including using tax credits. It’s no easy task—but here’s to “villages” that can house folks while boosting our sagging economy at the same time!

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