I’m a huge fan of churches using their property to produce affordable and workforce housing.
Kudos to these folks for putting their faith in action.
Category Archives: 2-HousingThink Topics
Let the Marketplace Work
Read this headline. Think about what it’s saying. It puts the words “affordable” (i.e., inexpensive and plentiful) in the same sentence with “lottery” (i.e., scarce).
Remember when 72-inch flat-screen TVs were a $10,000 luxury? Now we can select from scores of competing brands for a small fraction of that cost.
How did this happen? Was it the result of a lottery? Government regulation? Limits on new flat-screen TV production and ownership?
No. It was the result of competition.
Let the marketplace work. Deregulate the production of housing and let developers like me reach renters and buyers previously unreached.
From the piece:
“The affordable housing lottery has launched for 200 Montague Street, a 20-story residential building in Brooklyn Heights, Brooklyn. Designed by Beyer Blinder Belle and developed by Aurora Capital Partners, the structure yields 121 residences. Available on NYC Housing Connect are 38 units for residents at 80 to 130 percent of the area median income (AMI), ranging in eligible income from $54,960 to $215,1500.”
Gentrification vs Redevelopment (Revisited)
How is this any different than private investors purchasing dilapidated, unsafe homes and displacing the tenants (i.e., “gentrification”)?
In reality, ANY investment – private or public – which increases the stock of safe, decent housing should be embraced enthusiastically.
Let’s not settle for homeless encampments or squatters in boarded up housing. Discouraging investment to maintain the status quo does nothing to help these people.
The Perfect Storm
Rising construction & operating costs – along with rising interest rates – were partially offset by significant rent increases for market rate properties in 2022. Many of these deals were salvaged by increased market rents last year.
Not so for affordable multifamily.
Costs and interest rates rose for affordable multifamily, too. But rents – which are tied to household income – increased only modestly in 2022. Because of this, many of these restricted rent deals don’t pencil out.
From the piece:
“The 2023 housing market’s ‘headwinds’ are the same for all homebuilders — high construction costs compounded with high interest rates that have lowered borrowing amounts. But those challenges are especially sharp for affordable housing developers.”
A link to the news piece is found here.
Gentrification vs Redevelopment
This has always puzzled me. When private investment comes to a blighted neighborhood it’s labelled “gentrification” (which is bad, I am told). But when public investment comes, it’s labelled “redevelopment” (which is good, I am told).
Isn’t ANY investment in blighted neighborhoods good? Sure, the people being displaced need a safe/affordable place to live. But the blighted structures they lived in previously weren’t safe.
Isn’t the question we should be asking “What can we do to produce more affordable housing so people don’t have to live in slums?” Saying “Look at those heartless private investors, displacing poor families from blighted, unsafe housing?” seems to miss the point.
A link to the news story is found here.
Workforce Housing Development Strategy
Featured
A brief overview of Tartan Residential’s Workforce Housing Development Initiative:
Strength of Affordable & Workforce Housing Investments
“It’s critical for investors to understand that affordable housing is a strong and stable investment, one that’s resilient even when the economy isn’t. We have seen gains in the real estate market slowing, yet the affordable housing market remains strong.”
Link to article found here.
Modular Construction in Affordable & Workforce Housing
“Building homes off-site can help speed up the time it takes to complete homes in areas of the country that face extreme weather, Lawrence said, as the initial construction process takes place inside and away from the elements. It’s also more efficient in the sense that workers build the homes in an assembly line approach versus starting from scratch at each job site. Economies of scale not only reduce material costs, but they can also reduce waste generated during construction, Lawrence added. “
Link to article found here.
Durability of Affordable & Workforce Housing Investments
“Affordable housing has shown itself to be a strong hedge against a recession. While higher-end, higher-rent communities are more likely to be plagued with higher vacancies when residents tighten their belts, affordable housing always remains in demand — if anything, demand is even higher in a downturn.”
Link to article found here.
Johnston Farms Apartment Homes
Featured
Johnston Farms Apartment Homes is a proposed 120-unit apartment community serving families in Rock Hill, South Carolina. The estimated cost of this project is $35 million. This workforce housing development project, which targets families earning 80% of area median income, is proposed to be financed with essential function bonds. Construction is planned for May 2023.
The following video gives an overview of this energy-efficient workforce housing development. Feel free to contact Jeff Carroll at tartanresidential@gmail.com with any questions you may have regarding this or any of Tartan Residential’s other energy-efficient workforce housing development opportunities.