MULTIFAMILY MONDAY; Affordable Housing

The Census Bureau came out with non-shocking news last week: The proportion of Americans in poverty spiked from 14.3% to 15.1% last year. (That's 46.2 million of us.)
 
University of Southern California Lusk Center's Gary Painter  tells us there's a catch-22 for tenants as unemployment digs into incomes while rents rise with demand in the major metros. What then? Households are combining. Typically, one million new households form in the US every year; since ?08, though, there?ve been only one million total. (Stock tip: Invest in bunk beds.)
In Austin, Apartment Realty Advisors principal Dave Fournier tells us affordable housing occupancy is particularly tight for the LIHTC properties that serve tenants at 30% of area median income and where average market rents are high (i.e. Chicago). In other words, renters are downgrading asset classes and driving up demand for affordable housing. All of multifamily has been on fire, but investors are moving into affordable from market-rate for the fundamentals. The hottest affordable markets: California, Florida, and core cities.
Cantrell Co's Todd Franks, with partner Sam Pettigrew, tells us Class-C occupancy rose from 86.6% to 89.2% in Dallas County over the past six months and from 84.4% to 87.2% in Tarrant County. In tandem, rents rose 2.2% in Dallas County and 2% in Tarrant. Todd tells us a woman recently interviewed for an assistant position at Cantrell. She had been an apartment locator and was looking for something new because without concessions to entice renters, no one?s moving. Except, Todd says, for those downgrading from a higher asset class because of rising rents.
The 2010 poverty level is the highest since ?93, the year Joy Horak-Brown (at her firm's LEED Platinum 2424 Sakowitz in Houston) and her cohorts founded New Hope Housing in Houston, which provides supportive housing for those who don't have the income to qualify for affordable housing. The company, supported by LIHTC and  federal funds distributed through the city government, has  634 units (more like top-notch college dorms than Class-C apartments), but demand there, too, is on the rise: 160 more units are under construction, and Joy traveled to Austin last week to start work on a community there.

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