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Market-Based Solutions to Vital Economic Issues
News & Media
Nov 26, 2019

A Private Market View of Affordable Housing

The mission of the Kenan Institute of Private Enterprise to develop and promote innovative, market-based solutions to vital economic issues—and its capacity for bringing together diverse constituencies to create those solutions were both on full display on Nov. 22 at Investing in Affordable Housing Symposium. Jim Spaeth, executive director of the institute-affiliated Leonard W. Wood Center for Real Estate Studies, opened the symposium sponsored by his organization and the institute’s Kenan Scholars program by recognizing attendees from the public and private sectors and academia, saying that he hoped the day’s sessions would “spark significant dialogue across these groups.”

Keynote speaker John Hodges-Copple, director of regional planning for the Triangle J Council of Governments, walked the audience through local statistics on housing affordability and outlined the challenges posed by adding the one million new residents expected to move to the Triangle within the next generation. “Affordable housing is not just a housing issue,” said Hodges-Copple. “It’s also a healthcare, education and transportation issue.” That’s why, he added, cross-sector collaboration is the “only thing that’s going to move the needle.”

One of the continuing issues in the Triangle, Hodges-Copple said, is that there is very little “middle range” housing stock – townhouses, patio homes, duplexes and the like. Sixty-nine percent of households in the region consist of only one or two people, but only one-third of available housing is one- or two-bedroom units.

The call for additional smaller homes was echoed during the Emerging Affordable Housing Models breakout session. Aaron Lubeck of University City discussed issues of gentrification and how existing building codes (for example, minimum lot size and off-street parking mandates) help thwart attempts to bring higher-density housing to urban areas.

One recent affordable housing model to emerge is co-living, in which renters share an apartment with roommates, a grown-up version of college dorm housing with high-end finishes and amenities. Derrick Barker, co-founder and managing director of Domos Co-Living, said that the cost of rent in a co-living space can be 35 to 50 percent lower than rents for comparable studio apartments. Although Domos is currently focusing on a younger, single market, they are looking to expand the concept into family housing.

Erin Smith, vice president and development manager for Bank of America Community Development Corporation, discussed her organization’s workforce housing initiative. Bank of America is currently investing in 11 markets across the country, taking on $100 million in debt and an equal amount in equity annually over a five-year period to secure housing for middle-market homeowners. Smith said the lender is “taking a holistic approach,” to housing, partnering with local organizations on related issues such as food insufficiency, educational opportunities and financial literacy.

Pamela Watkins-West, senior director of real estate impact investing for Nuveen, outlined the efforts her company is making to buy low income and affordable housing with an eye toward keeping properties affordable beyond the expiration dates of their affordable tax credits. Like Bank of America, Nuveen views their responsibility as extending beyond mere housing to include peripheral issues. For example, the company is partnering with healthcare providers at a senior housing community in Brooklyn to provide healthcare services to residents.

A final luncheon keynote featured a fireside chat between Sharon Dworkin Bell, president of the Council of Large Affordable Housing Owners, and David Smith, founder and CEO of the Affordable Housing Institute. Smith asserted that the affordable housing crisis is something that “we in America have forged, like Marley’s chains, link by link,” through restrictive zoning laws, prohibitive construction costs and “carpetbagger” developers who are not vested in the communities in which they build.

Part of the solution, said Smith, is to build adequate infrastructure around affordable housing areas to attract new residents. That infrastructure includes access to educational opportunities, healthcare services, technology and government services – all things that presenters throughout the day said are critical to solving the affordable housing crisis.

Click here to learn more about the Leonard W. Wood Center for Real Estate Studies, or here to check out the Kenan Scholars program.


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