WASHINGTON, DC - The National Multi Housing Council (NMHC) has launched a new Workforce Housing Resource Center, including an interactive Project Estimator tool that allows real estate firms and policy makers to evaluate the financial viability of proposed "workforce housing" apartment properties. The Center, which NMHC is making available to the public at no charge, is located at:nmhc.org/goto/workforcehousing.
"The lack of affordable housing for service workers, healthcare workers and first responders is a well-known problem with no easy solution," said Doug Bibby, NMHC President. "In a perfectly functioning market, housing providers would simply increase production to meet the tremendous demand for what is generally referred to as workforce housing. But housing is far from a perfectly functioning market. High land and construction costs, regulatory barriers and local impact fees make it virtually impossible to build, rehabilitate and operate apartments at rents affordable to these workers in any mid- to large-size metro area."
"Localities that want workforce housing, and developers who want to provide it, have to find creative ways to bridge the gap between construction costs and affordable rents," said Bibby. "In some cases that means project subsidies. In others it simply requires expedited permitting or density bonuses. That's where NMHC's Project Estimator comes in. It functions like a commercial real estate underwriting system and allows users to evaluate the financial viability of a project under different scenarios."
"Users enter a project's financial pro forma data into the NMHC Project Estimator. They can then apply a wide variety of incentives common in public-private partnerships, such as tax abatements, expedited permitting, direct public investment and others to the project to determine what combination is necessary to make the project financially viable."
"We had two goals in creating this tool," noted Bibby. "The first was to help the private sector find ways to meet the growing demand for workforce housing. Given the tremendous demand for this product, there are many firms that would consider moving into the workforce housing market if we can help them figure out how to make the numbers work."
"We also wanted to educate local officials," explained Bibby. "Many of the local leaders who now find themselves responsible for solving their community's housing shortage do not have backgrounds in housing finance. Because they don't understand the economics of housing, they don't understand why some incentives work better than others in various marketplaces. The NMHC Project Estimator will give them a realistic analysis of different incentives and help them determine which ones meet the developer's needs as well as the community's goals."
"The NMHC Project Estimator represents more than a year's worth of work," explained Bibby. "It has been rigorously tested, and we will continue to refine it based on user feedback." In addition to the NMHC Project Estimator, the new NMHC Workforce Housing Resource Center also includes a comprehensive library of affordable housing resources and links, including toolkits for developers and localities, as well as detailed case studies of successful workforce housing projects. Future plans involve the creation of a design center showcasing sustainable and affordable apartment properties.
"Affordability problems don't discriminate," said Bibby. "They now exist in urban, suburban, and rural counties. To find affordable housing, many workers are being pushed farther and farther from their jobs. This is no longer a tenable solution in an era of $4 a gallon gasoline, and it's not sustainable if we are serious about wanting to reduce our national carbon footprint and tackle climate change. The apartment industry is committed to being part of the solution to the workforce housing by creating concrete tools for investors, developers and local officials."
Source: National Multi Housing Council