Perceptions of Affordable Housing Investment: 2019 Study Key Findings
As housing prices around the country have risen in recent years, groups like The NHP Foundation (NHPF) are encountering new populations in need of affordable housing such as retirees, public servants, and recent graduates. NHPF sought to address this growing need by gauging institutional investor interest in affordable housing. To achieve this goal, NHPF engaged Kingsley Associates, a firm with over 30 years’ experience in market research consulting for the real estate sector, to conduct confidential interviews with 31 key decision makers in the institutional investment world. Institutional Real Estate Inc. (IREI), a global media firm specializing in institutional real estate and infrastructure marketplaces, also provided expertise in shaping the study. Most of the participants are part of IREI’s list of the largest Global Investor Managers and are responsible for real estate investments in North America totaling more than $550BN. Defining Affordable Housing The definition institutional investors use for affordable housing varies, with the terminology sometimes getting confused with a couple of different terms. True affordable housing is defined as housing for a renter population which earns less than 80% of AMI (Area Median Income). This asset class is often confused with “workforce housing,” which The Urban Land Institute defines as: “housing that is affordable to households earning 60% to 120% of the AMI.” Fifteen percent of respondents use the terms interchangeably. Further confusing the definitions, is Naturally Occurring Affordable Housing (NOAH) which simply refers to affordable, unsubsidized rents that are relatively low compared to the regional housing market.
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