Affordable Housing Delivers 'Lower Beta' Income Stream

Photo: Shutterstock/Sommart Sombutwanitkul

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A puzzlingly common misconception in the investing world holds that investments that take into account environmental, social and governance considerations entail a certain trade-off: doing good for people/communities versus turning a profit.

While numerous meta-studies and academic papers have debunked this perceived trade-off, the stubborn misconception has persisted. This is true particularly in the real estate investment world, where many landlords or property owners seek to deregulate their affordable properties as quickly as possible, so as to cash in on higher market rate rents.

Although it may not seem as sexy as investing in gleaming new rental high-rises, affordable housing (Low Income Housing Tax Credit, Article XI, 421-A, and other programs) can actually be a more solid investment proposition than market rate properties.