You will not find the affordable workforce community replete in saltwater infinity pools or with a yoga studio. And even when these units don’t have the lavish feature, they still have an essential role to play says Maxwell Drever.
Maxwell Drever says that the affordable workforce housing apartments get developed for the renters who have about 60% to 120% of AMI (area median income). Hence, it denotes the modest income earners, like the emergency medical technician, police officers, nurses, firefighters, and teachers. These workers have an important role to play in society.
It is sad to notice that the apartment industry has become less hospitable for those who don’t have an increased salary. According to the latest research reports, the number of apartment homes in the United States with a rent of $2,000 every month has increased. And during this same time, the houses renting that cost less than $800 has gone down by 2%.
The numbers are crucial
Recently, the increasing rents and the declining or stagnant wages in the American workforce have added a challenge to pay for the lease. Close to 41% of most renter households in the United States got cost-burdened back in 2001. It means they paid over 30% of their overall income for housing. And the latest research shows that currently, the percentage has gone up to 48%.
And it is interesting to note that a recent Harvard University study predicts that the percentage of extremely cost-burdened renter families has a chance to go up from 11.8 million to a count of 13.1 million within 2025.
The relevant opportunities
Maxwell Dreverasserts that the advantage of affordable housing communities is huge for investors, operators, and owners. Close to 50% of the units are considered affordable units or workforce housing. Simply put, affordable housing indicates the communities for the families with an income 60% less than the AMI. And usually, such properties get assisted by federal programs like low-income housing tax credits.
Additionally, workforce housing is considered a stable domain of the apartment business. Here the occupancies are slightly more than Class A as the demand is more and the supply is limited. Furthermore, the turnover is usually lower. Also, the product is slightly less volatile for economic swings. However, in case of a recession, the renters might stay away from high-quality products.
Finally, one of the major advantages of affordable workforce housing is customer loyalty. Here you can get to leverage the advantages of the long-tenured residents as well as the increased occupancy. And a part of this is the demand and that you can never take for granted. You need to have real operational expertise and bring it to the table. That way you can work in a way to develop relationships with the residents.
Hence, keeping in mind the current scenario of the housing crisis in the United States, the concept of affordable workforce housing is beneficial. It provides shelter and comfort to a huge section of people. And that, in turn, translates to better social security and overall economic development.