Among the most difficult sectors within the real estate industry to navigate is affordable workforce housing says Maxwell Drever. Today’s property market is, without a doubt, a key contributor to this stumbling block. While traditional tenants are more likely to consider their financial status, credit score, as well as other critical variables, most renters in inexpensive housing are incapable of providing a financial capability letter. It is not uncommon for tenants in low-income housing to have poor credit, and/or prior evictions.
People with low wages
The notion that salaries have increased at a slower pace than rents in many regions has contributed to the ever-increasing shortage of available affordable workforce housing. Several cities have seen a surge in multifamily residential buildings during the current upswing, but high infrastructure and maintenance costs have driven many investors to concentrate on high-end projects.
According to research, well over 30 million U.S. households—nearly a third of the total—spent upwards of 30% of their salaries on housing during 2016. The usual definition of someone being “cost-burden.” In 2016, about 21 million renter families were cost-burden. Accounting for 47 percent of any and all renter households. And more than 50% of them were forced to spend more than half the amount of their income on housing.
Misconception about an investment in affordable workforce housing
Among the most significant obstacles that affordable workforce housing experts face is a misunderstanding. That investment in social impact necessitates compromising investment returns. The evidence contradicts this, and eliminating this myth is one of many tasks. That experts in this niche must work to overcome. The reality is that when done correctly. Investments with social impact in affordable workforce housing may provide greater risk-adjusted returns than investments without. Since experts in this sector, unlike most other real estate investors, do not speculate on demand. Their returns are tie-less to broad market indexes like borrowing costs.
A more collaborative effort is required to address the affordable workforce housing crisis
Experts in the know see affordable workforce housing as a crucial need and a key investment area. The United States is facing a severe affordable housing shortage says Maxwell Drever. Across the country, approximately one in every two renter households is “rent-burdening,” This issue creates many challenges for those affected.
What can be done to increase the amount of available Affordable Workforce Housing?
Experts like Maxwell Drever have optimized the Broken Hotel to Affordable Workforce Housing conversion process. Developments such as these utilize closed or near closed hotels with resort-like amenities such as swimming pools and meeting spaces. The investment works in that developers and investors make above-average returns. And renters are offers resort-like living accommodations in the $500-$700 per month area. Amenities include beautiful modern apartments, child-care, exercise rooms, swimming pools, common areas and so much more.