Affordable housing has never been an easy asset class to develop. With rent restrictions inherently built into the business plan, these deals can be difficult to pencil alongside soaring construction costs and land prices. Despite the challenges, there is record demand for affordable housing, and more and more developers are meeting the challenge.
Securing capital is at the top of that list of challenges. Affordable housing experts Al Beaumariage and Tori O’Brien of KeyBank Real Estate Capital say that creating customizable capital solutions is essential to getting affordable housing deals across the finish line. We sat down with Beaumariage, program manager and SVP, and O’Brien, head of equity originations and SVP, to understand the nuances of funding an affordable housing project in today’s market.
Beaumariage and O’Brien explain why customizable and flexible financing solutions help curb the market volatility, particularly amid rapidly rising construction materials costs. But as market leaders that are in the trenches daily, they are also able to provide insight into the details that can make or break a deal, like extension costs, crucial legislation and alternative funding sources.
Hit play to hear directly from the experts about the capital trends informing affordable housing and some real-world examples from their playbook.