Solutions to affordable housing needs should come from city, regional, and state-level actions rather than the federal government, according to 83% of the respondents to a recent survey conducted by Walker & Dunlop.
At the same time, 93% of the respondents say the federal government isn’t doing enough to increase the supply of affordable housing.
Walker & Dunlop, one of the nation’s largest commercial real estate finance and advisory firms, surveyed attendees at AHF Live: The Affordable Housing Developers Summitt in November. About 30 affordable housing development and finance executives were polled to get a snapshot of the industry heading into the new year.In addition, firm leaders met with more than 100 clients during the Chicago conference.
“There’s a dire, worsening affordable housing crisis, but the industry continues to be really resilient, stable, and growing,” says John Ducey, senior vice president and chief production officer of Walker & Dunlop’s affordable lending group. “More and more people want to be in the affordable housing space, financing and doing deals, and people want to continue to move forward and get deals done.”
Although 2023 has been a challenging market with different headwinds, developers are committed to getting projects done in the new year, according to Ducey.
“I didn’t hear anybody say, ‘We’re taking 2024 off,’” he says.
Other survey findings include:
- 100% of respondents don’t think there is enough affordable housing supply for low and moderate-income families;
- 74% of respondents do not support multifamily lending caps for Freddie Mac and Fannie Mae;
- 66% of respondents feel the commercial real estate economic environment in 2023 is better off than during the global financial crisis in 2008; and
- 62% of respondents feel that office building conversions are a viable solution for addressing the affordable housing shortage.
Ducey says the response to the Freddie Mac and Fannie Mae caps is a bit surprising. While a good majority do not support the agencies’ multifamily lending caps, 26% seem to back the limits.
This may be because some people feel that Freddie Mac and Fannie Mae should not have an out-sized role in the debt market, notes Ducey.
While the survey has a small sample size, it still offers a good look into the larger market.
“There’s optimism in it,” Ducey says, citing how 62% think office conversions are a solution to creating affordable housing even though these conversions can be extremely difficult. “…People are optimistic. They want to solve the affordable housing problem. They want to be involved and engaged in it.”
He says he expects overall volume of affordable housing deals to be higher in 2024 than this year.“If there is stability and a reduction in interest rates, I think we’re going to have a little more production,” Ducey says. “…2024 is going to be better than 2023. The question is how much better.”
