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Demand for affordable housing is growing across the country, including in emerging markets like Denver. However, capital is catching on to the need for affordable housing, both on new development projects and LIHTC-backed rehab projects. This capital has been an important aspect of bringing more affordable housing to markets suffering from a housing shortage.
“Investors such as banks and insurance companies are realizing that there is incredible value in LIHTC-backed rehab projects,” Anand Kannan, leader of the preservation and development teams at Community Preservation Partners, tells GlobeSt.com. “In addition to offsetting tax burdens and providing a yield that is competitive to market-rate investments, an affordable housing investment comes with significantly lower risk of vacancy.”
It isn’t only the financial benefits, but capital is also attracted to social impact benefits of affordable housing. “Investors also enjoy the derivative impact of deploying capital with a purpose, which generates value in the form of PR and employee productivity,” says Kannan. “The rehab model, particularly, supports intangible value through environmental sustainability because no property is cleaner than the one that’s already built. All of this ROI adds up to an enticing proposition for those in charge of capital investments.”
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Kelsi Maree Borland
Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.
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