Maybe the surprising news about affordable housing is how little surprising news there is.
Like the little engine that could, the sector continues to chug through the nation’s economic uncertainty with energy and determination. That’s just one takeaway from a recent interview with CBRE Affordable Housing’s executive vice president Tim Flint.
Flint is a leader on the CBRE Affordable Housing sales and advisory services team, focusing on transaction management, business development, and client service delivery. The 16-year industry veteran has directed over 600 low-income housing tax credit and Department of Housing and Urban Development transactions totaling more than $6 billion.
What explains affordable housing’s comparative calm? Where does Flint see the industry’s trajectory in 2021 and beyond? A few thoughts:
Where do things stand at this time in late summer?
Deals are getting done. True, it’s not business as usual, given the travel and property inspection issues, but even in April we were putting properties under contract and closing them in June. We’re not 100% back, but affordable housing is in better shape than other commercial property types right now.
What explains this encouraging environment?
I think investors like what they see with affordable housing. The demand for clean, affordable housing is high and isn’t going away. There are no immediate tax policy threats. Plus, the multifamily investor is so much more sophisticated today than they were, say 15 years ago. Their investment objectives are clear and understood.
How is the upcoming election influencing the market?
There’s a small minority waiting out the election on the sidelines, but the majority of investors think long-term, well beyond the election, five and 10 years out. They’re not so election focused. The affordable housing market fundamentals are strong, so the election isn’t being seen as a major disruption.
How are you advising investors right now?
There’s no need to act rashly because of what investors are observing in other property types, like retail or class A office. The conditions are different in affordable housing. There are fewer inhibitors on planning affordable housing deals, so investors can proceed with more confidence.
Take the agencies for example. Today, Freddie Mac and Fannie Mae listen carefully to market voices and do their part to respond. They take our feedback and work at coming up with products and processes to better recapitalize affordable multifamily properties.
What else encourages you about the sector?
Most investors are very cognizant of the social impact of their investment decisions. They understand their role in the big picture. Don’t get me wrong—investors expect a fair or better return. Yet, I think you’d be shocked by how many investors enter into a deal with a view of not only rehabilitating and preserving the affordability of the property but also improving the lives of the residents who live there.
The affordable housing market’s certain high demand incentivizes public and private leaders to come up with smart, creative financing solutions. The long-term prospects for the industry have never been better.
Learn more about affordable housing investment opportunities now available.