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Are Inmates the Answer to Affordable Housing Issues?

One of the major issues facing the housing industry is the persistent battle for inventory and affordability. 

Iowa is looking to combat that, as it is using inmates from the Newton Correctional Facility to build houses [1]as part of the new Iowa Prison Industry Program called Homes for Iowa. 

According to a report from FOX News, the program is modeled after South Dakota’s Governor’s House Program, where inmates construct affordable homes to income-qualifying families. South Dakota’s program puts inmates to work while teaching them life skills.

“We should be able to ensure that low-income people have housing and ensure that people who are incarcerated aren’t exploited,” Angela Hanks, a former Director at the Center for American Progress, told the Associated Press. “I think it presents a little bit of a false choice in terms of what is necessary to ensure that low-income people have access to safe affordable housing.”

Mark Lauseng, Executive Director for the South Dakota Housing Authority, said the program builds roughly 100 two-and-three bedrooms homes as the demand for affordable housing grows across the state. 

“Our communities have talked to us for years about issues with housing,” said Mike Norris, Executive Director at Southeast Iowa Regional Planning Commission. "It was getting more expensive to develop housing. People couldn't afford to build like they could in the past and they asked us to try and find solutions. We approached Iowa Prison Industries to help.”

Concerns over affordability, however, are not going away. CoreLogic’s latest Case-Shiller Home Price Index [2]revealed that home prices rose 3.4% in May 2019. 

“Growth in home prices, as measured by the Case-Shiller HPI, began to stabilize in May.  The more than 100 basis point decrease in mortgage rates since November has revived home sales and given buyers additional purchasing power in the market,” said Tian Liu, Chief Economist at Genworth Mortgage Insurance. “That extra purchasing power is beginning to show up in home prices.”

The 10-city composite annual increase came in at 2.2%, which is a slight decrease from 2.3% in the previous month.