Our industry has a problem that is gaining attention from many high-end developers and lenders. It is the issue of affordable housing. No, this is not another article about low-income housing, although that’s a part of the housing puzzle not yet solved. This is an article about workforce and middle-income housing – those not just in urban population centers but now in suburban and secondary markets that make 80-120% of AMI (average median income). A sector that many describe as the biggest renter pool moving forward.
As rents have steadily increased due to factors like occupancy, new construction and renovation of older housing stock, those in the middle have been left with fewer housing choices. I recently read that a full 50% of renters in the US are paying more than 30% of income on housing – 30% being the threshold of what is considered a strain on families. Therefore, moving to the middle becomes not just a necessity for us as a country but also for us as owners and operators. It is an opportunity to find superior returns while helping an under served section of the population.
Providing, updated, safe and clean communities in good school districts is vital and a winning formula for superior ROI. Numerous reports show that the best risk adjusted returns right now are bringing C product to B- or B levels. As the renter pool grows over the next decade, this is the real future of multifamily. At CRG we have renovations programs that tailor to not just high-end users, but for affordable and workforce housing as well. We cover large portions of the US with self-perform solutions that provide our partner clients remarkable ROI and much needed housing choices to the masses.