THE ROLE OF CONSTRUCTION MANAGEMENT

The Role Of Construction Management In The Construction Of Affordable Housing



The Role Of Construction Management In The Construction Of Affordable Housing

Without affordable housing, the problems of homelessness will never be solved. High housing costs often put individuals and families at risk of homelessness when their incomes are too low to pay for housing plus other basic necessities. People fleeing domestic violence frequently find themselves back in violent situations because they can't find affordable housing. People on fixed incomes find that rising housing costs outstrip their meager incomes. A high demand and a shortage of affordable housing make it even more difficult for people with disabilities, people with a history of substance abuse, and people with poor credit records to obtain housing. For people needing temporary or seasonal housing, affordable units are in short supply. (Smith, 1996, 1)

Objectives Of Construction Management In The Construction Of Affordable Housing

People measure housing affordability by the ratio of household income to the cost of available housing. For more than a century, the recommended standard for housing affordability was that households should spend no more than one-fourth of their income for shelter expenses. This ratio dates back to the writings of economist Ernest Engel. Using analysis of a survey of Belgian working-class families conducted in 1857, Engle proposed an economic law stating that the ratio of a household's income spent for housing is constant regardless of the household's income. Engel's law focused on food as the most essential expenditure within a household. Of necessity, food costs would vary depending on the number and age of people in a household and the ability to self-provision through foraging, hunting, gardening, or raising of livestock while the housing cost could remain constant even when household composition changed. The rule of thumb that emerged from this perspective was “one week's wage for one month's rent.” This ratio could be readily applied in decision making for minimizing risk in renting an apartment or granting a mortgage to a given household. This ratio remained the norm until the mid-1970s. (Fisher, 1997, 256)

Critics of Engel's economic law have proposed other measures of affordable housing. As early as 1868, other economists critiqued Engel's work. Herman Schwabe, for example, published detailed research on housing expenditures within the household budget. His research on wages and rent indicated that as income rose, the percentage of income spent on rent fell. Schwabe proposed an alternative economic law stating that the poorer the household, the greater the proportion of income must be spent on housing. (Fisher, 1997, 255)

More recent critics of Engel's economic law note that over time, consumers' shifting expectations regarding their housing have also affected household consumption patterns. They propose that the proportion of income spent on housing would have increased over time as other costs have decreased and as housing expectations have increased. (Smith, 1996, 1)

The increase in the standard from 25 percent to 30 percent of household income as a reasonably affordable shelter cost occurred during the ...