Workforce housing is a term used to describe housing that is affordable for middle-income households, typically those earning between 60% and 120% of the area median income (AMI). This type of housing is designed to serve essential workers such as teachers, firefighters, police officers, healthcare workers, and other critical personnel who often struggle to afford housing in the communities they serve.
Key characteristics of workforce housing:
- Affordability: The primary goal is to keep housing costs within a reasonable percentage of household income, usually around 30%.
- Location: Workforce housing is often located in proximity to employment centers, reducing commute times and transportation costs.
- Quality: While not necessarily luxury apartments, workforce housing should offer decent living conditions and essential amenities.
Types of investors needed to make workforce housing happen:
- Government agencies: Federal, state, and local governments often play a crucial role by providing subsidies, tax incentives, and zoning flexibility to encourage workforce housing development.
- Institutional investors: Pension funds, insurance companies, and endowments can allocate capital to large-scale workforce housing projects, bringing stability and scale to the sector.
- Private equity firms: These firms can provide the necessary capital and expertise to develop and manage workforce housing projects.
- Nonprofit organizations: Community development corporations and other nonprofits can play a vital role in developing and preserving workforce housing, particularly in underserved areas.
- Impact investors: These investors seek both financial returns and social impact, making workforce housing an attractive investment opportunity.
Why invest in workforce housing?
- Social impact: Provides essential housing for vital community members.
- Stable returns: Workforce housing tends to have consistent occupancy rates and predictable cash flows.
- Recession resilience: Demand for workforce housing remains relatively stable even during economic downturns.
- Growing demand: The need for workforce housing is increasing in many areas due to rising housing costs and stagnant wages.
Our goal is to attract a diverse group of investors and communities to create more workforce housing options, to ensure essential workers can afford to live in the areas they serve.