Affordable Housing Capital Still Not Enough

The deep demand for affordable housing has spurred investment interest—but even as demand has grown, there is still too little capital playing in the affordable sector to make an impact. More investors and capital sources are beginning to understand that affordable housing, through several avenues, offers healthy returns, particularly in supply-constrained markets. Still, there are some misconceptions about affordable housing investment that has prevented more investors from entering the affordable space.

“While affordable housing is seeing an increase in investor interest, it is a drop in the bucket compared to what is needed,” Jonathan Needell, president and chief investment officer of KIMC, an employee-owned, entrepreneurial real estate investment company, tells GlobeSt.com. “Investments that involve owning, managing, maintaining, and preserving affordable housing, either naturally occurring or specific purpose-built, are increasing in number. However, we believe that the total capital raised in the space to date has not been sufficient enough.”

Launching social programs on site is a way to drive success at an affordable asset. These programs can help to drive occupancy as well as reduce tenant turnover. “By creating a sense of community at a property we believe tenants will be more satisfied and engaged in a sense of community,” explains Needell. “This provides for a pride of place and increased tenant enjoyment of a property leading to renewals and higher occupancy. Landlords can foster this environment by running social programs for the benefit of tenants, which compliments the sense of community that we believe drive occupancy.