THERE IS A LOOMING CRISIS in affordable rental housing.
For market-rate apartment developers and owners, these are the best of times. Vacancies are low. Rents are rising. Demand exceeds supply. Perhaps brightest from their perspective, the market is being flooded with so-called "value-add" institutional capital. This capital is being used to acquire and upgrade older rental properties. Rents increase, property values rise, and investors are happy.
Unfortunately, the low- to moderate-income renters are being left behind. As rents are increased by $100 to $200 per month, many existing tenants can no longer afford to stay.
This country has an infrastructure of for-profit and nonprofit developers who are constantly seeking new sources of funding to ramp up the creation and preservation of affordable multifamily units. However, new construction and the preservation-rehab of affordable rental housing are constrained by limitations on federal government programs such as project-based Section 8 rent subsidies, a finite annual supply of low income housing tax credits, the high prices of land and buildings, and the decreasing supply of subsidies at the state and local level due to budget cuts. Without additional capital for the preservation of existing properties and investment in new development, the severe shortage of affordable housing is only going to get worse.
At The NHP Foundation, we are closing the first of what we hope will be a series of funds with a major financial institution. Its investment strategy is the rehabilitation and preservation of existing affordable multifamily housing. The first fund alone should allow us to preserve over 5,000 units. That's not just smart business, it’s good corporate citizenship. The looming crisis in affordable housing impacts the country sociologically, politically and economically.
Over decades, NHPF has remained true to its mission of creating and preserving quality affordable housing. Working through partnerships with major financial institutions, the public sector, faith-based initiatives, and other nonprofit organizations, NHPF will continue to utilize its expertise, energy, and fiscal discipline to preserve and create thousands of additional units in the next few years.
Please join us in making safe, clean and affordable housing a dream come true for more American families.
Richard F. Burns
Chief Executive Officer
The NHP Foundation