Well, we can plan for it…

According to the Real Deal Jonathan Rose and Company in partnership with 125 investors including Ford, Deutsche Bank AG’s Community Development Finance Group, an asset management arm of TIAA, Nueveen, private individuals, family offices, pension funds, banks and nonprofit foundations, have raised $233 million for a fund dedicated to Affordable Housing.

A surge in luxury apartments, landlords now being forced to make deep concessions to rent apartments and the need for steady income have been variables identified in the Wall St. Journal as leading investment interests in Affordable Housing. According to the article, developer Jonathan F.P. Rose, founder and president of Jonathan Rose and Company stated; “Enormous demand for low rent apartments continues to outstrip supply in cities across the country, making these investments low risk…”He estimates “65,000 affordable units are built each year in the U.S, but 150,000 units are lost every year to buyer’s raising rents.” Government funds, tax subsidies, and credits to preserve housing help lower costs leading to lower financial risks which also make it more attractive for investors. as stated in The Wall St. Journal; “That holds appeal for investors looking to remain invested in real estate without increasing their exposure to assets that might be richly priced. Developers looking to buy affordable properties without rental restrictions and boost rents also are entering the sector and cranking up competition.” 

Rebecca Regan Executive Vice of the Housing Partnership Network  states in both the Real Deal and Wall St. Journal; “Real-estate developers are turning from luxury apartments and are eyeing this investment class, buying up a lot of units, repositioning and putting them out as market-rate units.”  The new fund, called the Rose Housing Preservation Fund IV L.P. is designed to acquire, improve and preserve affordable-housing properties and as per Mr. Rose as stated in the Wall St. Journal, “… it is well-positioned to compete with those other potential buyers because of the company’s decades of experience and deep knowledge of the affordable housing financial and regulatory world.” In addition to knowledge of the regulatory world, Jonathan Rose and Companies creates energy efficient buildings which reduce costs by 20% or more within a five year period.

Calls to continue to examine and create Affordable Housing incentives have been underway. New York Housing Conference NYHC, has provided a policy brief “The Affordable Housing Credit Improvement Act of 2017 (HR 1661): How it Can Help New York’s Housing Crisis.” Groups like Real Affordability for All have developed strategies like converting the 80/20 housing model to 50/50 and adjusting Area Median incomes (AMI) to assist in the development of housing for lower and middle income tenants. Jane Graf, CEO and President of Mercy Housing; Michael Bodaken, President of the National Housing Trust; Patrick Sheridan, Executive Vice President for housing of Volunteers of America and Terry Parker, Director of Property Management for the Good Samaritan Society, who represent four of the largest nonprofits in the country, have written an article “Don’t ‘Kill’ the Low Income Housing Tax Credit, Expand It” demonstrating the need for low income tax credits published in Affordable Housing Finance and posted by Donna Kimura, Manager, Editor/Reporter for Affordable Housing Finance. In it, the nonprofit authors challenge the Wall St. Journal opinion piece “Kill the Loopholes, Including the One for Low-Income Housing” written by Chris Edwards and Vanessa Brown Calder, who state the tax credits do not help the poor. The nonprofit authors state the tax credits for Affordable Housing should not be eliminated, though rather, expanded.

So what does all this mean anyway? City Limits breaks it down here.

Let’s keep it movin’ movin’…!