It is a well-known fact that median-income households have struggled of late to own property. This is due to soaring housing rates and burgeoning inflation. As a result, more and more people in this earnings range are moving further away from their job sites, and into homes that are in poor condition.
COVID-19 and increasingly high rents have only added people’s woes. And for the same reason, families in the medium-income range have been struggling to save. What has emerged is a situation where families deprive themselves of proper access to basic needs such as health care and even food.
The lack of affordable workforce housing in the United States is a primary culprit. It is said that in order to meet current supply needs, seven million reasonably priced apartments would need to be built in the United States. This unfortunate fact has put individuals and families in a budgetary crisis of major proportion. According to renowned impact real estate investor Maxwell Drever, there is a way to meet this problem head-on.
Of course, modular construction can be used suggests Drever. And this approach can save 10% to 15% when compared to on-site from the ground-up construction. However, these types of projects work best when established in partnership with local municipalities. But first, the municipality must find suitable land, purchase it at market rates, and provide it at below-market levels. That said, while this is a solution – lower land costs and modular construction can impact the total capital cost and delivery deadlines positively – it is not the best one.
Broken Hotel to Affordable Workforce Housing Conversion
Like most business sectors, the hospitality industry suffered a significant blow due to COVID-19. In particular, it brought the financial affairs of hotels that had already been struggling to the tipping point, and many closed as a result.
A bad situation for hotel owners has become a good situation for those with broken hotel to affordable workforce housing conversion experience. Hoteliers that formerly had no hope but to demolish their supposedly single-use buildings now have options to help themselves recover what they thought would be a total loss, and do something good for society in the process. Maxwell Drever explains that these old and broken hotels can go a long way toward lessening the affordable workforce housing crisis.
This good news is not meant to imply that all hotels are conversion-worthy. Worthy hotels must contain several elements to be attractive candidates. Among them for starters are the remnants of a solid infrastructure, a minimum of 200 rooms, and a swimming pool.
A word of caution. Hotel owners should be careful to attempt conversions such as these on their own. Why? Because developers who have done hotel to affordable workforce housing conversions say that their first attempt at this was amongst the most challenging projects of their career
In conclusion, the shortage of affordable workforce housing is indeed a national crisis – and one that cannot be fixed within a short period of time. But if all the responsible parties, from agencies to all levels of government, and finally to private developers address the problem, the rewards to our country will be incalculable.