Affordable Housing Should Be Top of Mind

WITH THE ECONOMIC SHIFT IN THE NATION AFFECTING HOUSING, IT ENCOURAGED THAT PROPERTY OWNERS KEEP AFFORDABLE OPTIONS AT THE FOREFRONT:

“‘Regulation is something that should be top of mind for a lot of property owners. And we’re starting to see significantly more rent control laws being passed at the local and municipal levels. That does have trickle-down impacts to individual property owners.’ That warning comes from the head of advisory services for a real estate data analytics firm. As shelter costs increasingly strain household budgets, some state and local governments are resorting to regulation to address affordability.

“As of spring 2022, at least 17 states were considering some form of rent control legislation, according to National Multifamily Housing Council tracking. The states span all regions of the country and both political parties, demonstrating the breadth of frustration with rising rents. ... the volume and range of these proposals show just how widespread the concerns are, and some of these initiatives could be revived if rents do not cool soon.”

2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 27

“Affordable housing program support of approximately 640,000 units nationwide is scheduled to expire over the next eight years. This is in addition to an estimated shortage of 7 million low-income units needed to meet demand. These expirations present a unique investment opportunity to maintain the affordable housing designation or to rehab and convert them to market-rate units. Affordable housing investment is particularly attractive because of strong and stable fundamentals, growing demand and access to more favorable lending terms, such as longer loan terms, higher loan-to-value ratios and longer amortization periods.”

U.S. Real Estate Market Outlook, Chapter 7, Multifamily — CRBE

Climate Change’s Growing Impact on Real Estate

THE STATE OF THE ENVIRONMENT WILL BECOME A GREATER DETERMINING FACTOR IN HOUSING DECISIONS:

“Climate change may alter the dynamics of where people want to live and invest. In addition to the discomfort and health risks of living in ever-hotter climates, energy costs rise with temperatures, as do the risks of power outages as more strain is placed on power grids. Extended drought conditions may limit new development because authorities may limit new hookups.”

2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 24

“Rising disaster-insurance costs will also make extremely climate-risky areas even more expensive. Some Americans will be priced out of climate-risky areas like beachfront Florida and the hills of California because of ballooning insurance costs.” Redfin expects “disaster-insurance rates to continue rising next year (and beyond), rendering housing in some areas more expensive.”

Housing Market Predictions 2023: A PostPandemic Sales Slump Will Push Prices Down for the First Time In a Decade — Redfin

THE ECONOMIC STATE MAY GENERATE SOME CHANGES WITHIN THE HOUSING INDUSTRY, BUT THERE IS A POSITIVE OUTLOOK WHEN IT COMES TO SENIOR LIVING:

“Looking ahead, many reasons exist to be optimistic about the outlook for senior housing, but the path forward may be a bit bumpy due to the prevailing winds in the broader economy. Inventory will continue to expand, although at a reduced pace in the near term, which should act as a tailwind for occupancy improvement. And, while demand may also be affected by economic headwinds, the value proposition of senior housing— security, socialization, engagement, room and board, care coordination, and lifestyle—remains in place and ultimately should win the day by attracting new residents to senior housing properties. In addition, the movement of many operators to incorporate wellness programs into their offerings has the potential to be a significant competitive advantage as potential residents seek communities that hold promise to improve the quality and length of their lives.”

2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 45

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