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Density and Affordability The density of development—as well as broader market forces—can have a significant impact on the affordability of housing. A building with more units per acre can spread costs like land purchase and design over those units, lowering the costs passed on to individual renters or buyers. Conversely, a building with fewer units per acre would have to charge higher rents to recover land and design costs, pushing housing costs out of affordable reach for many households in the community. This connection between density and affordability also impacts what development types are economically feasible. Density can help developers keep rents low enough to meet the housing demand in a community. Restrictions on density, alternatively, can make development so costly and unmarketable that development does not occur at all, further constraining supply. The chart to the right demonstrates how these development economics impact affordability for buyers and renters. Lower density development translates into higher home prices or rents per unit, which only a small slice of Blacksburg’s households can afford. Higher density development, by comparison, is in reach for a broader range of residents in Blacksburg.

RELATIVE AFFORDABILITY OF NEW HOUSING CONSTRUCTION TYPOLOGIES

% of Blacksburg households who can afford housing price

Required Household Income

Density per Acre

Required Home Value/rent/unit

$685,000

$185,000

4 units

5%

$460,000

$125,000

10 units

13%

$1,450 per month

31%

35 units

$58,000

40 Chapter 2 - Analysis: A Framework for Downtown Blacksburg

$1,350 per month

$54,000

33%

60 units