Even a quick glance at core urban markets will reveal a pipeline of new apartments catering to the luxury crowd. Sure, there are some great, oftentimes very creative, government assisted low income housing developments as well. But what about the middle class? Over half of the U.S. population makes between $25,000 and $55,000 per year, yet we never hear about new construction targeting that income bracket.
“That’s because the pipeline for product that is affordable for that income group is nil—there is nothing there,” says Kevin Finkel, president & COO at Resource Real Estate Opportunity REIT, a fund that specializes in value-add workforce housing. The entity is sponsored by Resource Real Estate, which operates a portfolio of 20,000 self-managed units.
“Nobody today would ever build an apartment community that would serve this population,” he adds. “The cost of construction basically necessitates product that is going to achieve roughly $2,000 a month in rent. If you can’t get $2,000 a month in rent, it makes no sense to build. So it is not getting built.”
Read more...Where are Apartments for the Middle Class? | Multi-Housing News Online
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