The Rent Roll with Jay Parsons EP#11 Alecia Hill | The Institutional Buy Box On Affordable Housing
Nov 26, 2024
Alecia Hill, Vice President for Impact Investing at FCP, specializes in affordable housing investment strategies. In this discussion, she delves into the declining availability of low-rent units amid new upscale developments. Hill shares her journey from performing arts to real estate and underscores the need for innovative public-private partnerships. The conversation also tackles the challenges tied to expiring affordable housing tax credits and highlights the complex landscape of housing policy reforms necessary for tackling today's affordability crisis.
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Historic Drop in Housing Starts
- There is a significant gap between multifamily housing starts and completions in 2024, indicating reduced future supply.
- This gap signals a historic drop-off in affordable housing supply unseen since the 1970s.
Decline of Low-Rent Units
- The number of low-rent units is declining sharply due to filtering effects and high construction costs.
- Ultra-low rent units below roughly $800/month are especially hard to maintain or build, worsening affordability.
Affordability Issue at Low End
- Affordability challenges predominantly affect the low-end rental market, not higher-end institutional rental housing.
- Institutional renters generally spend around 20% of income on rent, less than the 31% national average.