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. To address this growing need, NHPF sought to increase partnerships with institutional capital in order to serve its mission to preserve and increase service-enriched affordable rental 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,” a generic term that has come to mean housing that is affordable to workers and close to their jobs. The Urban Land Institute defines workforce housing as: “housing that is affordable to households earning 60 to 120 percent of the area median income.” 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.
Perceptions of Affordable Housing Investment
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