The Costs and Benefits of Affordable Housing: A Partial Solution to the Conflict of Competing Goods
Written By: Michael Diamond
In this Article, I extend a prior inquiry into the costs borne by society due to the lack of enough decent, affordable housing units. I previously outlined those costs and suggested a combination of public cost savings and public and private benefits that would accrue by providing that housing. I posited that the savings and benefits, in the aggregate, could at least substantially offset the costs and might even exceed them. If that is so, I queried, why has society not produced the needed units? In answering that question, I offered several possible responses: inadequate resources, racism, and public choice opposition.
In this Article, I examine the lack of resources in the context of what I have called “the conflict of competing goods.” This conflict arises when there are a variety of public goods to be obtained but insufficient resources to maximize them all. The questions then are how does society choose among them and how ought it do so? I attempt to answer these questions by reverting to a form of evaluation espoused by economists and certain politicians—Cost-Benefit Analysis (CBA).
While I do not accept CBA as the appropriate model for many types of evaluations, I use it here to support an argument that society should provide more affordable housing units. I attempt to identify the costs of the absence of such housing in relation to the benefits of providing it in an effort to enhance the other arguments—morality, equity, etc.—that underlie my own view of the problem. Thus, if the hypothesis is correct—that affordable housing can, essentially, pay for itself, the conflict of competing goods can be substantially, although not entirely, reduced.
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