Workforce Housing That Makes Economic Sense
The marketplace needs vastly new innovations to resolve the lack of middle-income units. Solutions do exist.
Media and industry conversations are ripe with talk about the vast and rising need for middle-income housing and workforce housing.
Our declaration, in opposition to the common narrative of middle-income housing projects, is that it can and does make economic sense to build the type of housing.
Housing development markets are bifurcated. On one end of the spectrum is market-rate or luxury housing built in urban and suburban areas in high-density walkup, podium or high-rise configurations, where the marketplace needs to charge maximum market rents to afford high-density build costs. On the other end of the spectrum is what we call “true” affordable housing, units with rents at or below 60 percent of median area income, and which can only be built to the level of available soft subsidies: tax credits, housing trust funds and other finite sources of affordable housing capital. The bottom line is: There will never be enough capital to meet the demand for housing at these income levels. In Southern California, for example, there is a 1.13 million-unit shortfall in housing production for families at or below 50 percent of MAI, according to a report release by the California Housing Partnership Corp.
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Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.