Affordable housing is a widening concern for owners/operators and tenants alike as inflation and expenses rise across the United States. With a national shortage of approximately 7 million affordable rental homes for low-income families, owners/operators, asset managers, and investors need to focus their attention on new affordable housing projects to serve their communities.
Today, CRE professionals are more widely recognizing the housing challenges associated with rising costs. Whether creating more affordable communities or finding ways to cut expenses, affordable housing OpEx teams are considering new opportunities and methods to ensure low-income families have a home. Thirty Capital’s Founder and CEO, Rob Finlay, recently spoke on a panel of commercial real estate (CRE) experts to discuss their experiences, concerns, and insights pertaining to the affordable housing market.
Read ahead for their key takeaways.
Key Takeaway #1: Owners/Operators Are Concerned About Controlling Expenses and Meeting Residents’ Needs
The panelists shared concerns around managing expenses and meeting the needs of the residents, individuals, and families who rely on safe, affordable housing. In the past, rents were increased only when necessary. However, the current economic climate is forcing property managers to raise rents more frequently. For families struggling to make ends meet, regular rent increases can be a source of stress and concerns. The panelists agreed that minimizing costs to maintain affordability for these residents and their families is urgent.
Key Takeaway #2: Cost Challenges Are Slowing Tech Adoption Across CRE Firms
The fear of high costs associated with technology solutions are a significant barrier to tech adoption for CRE firms. Cost concerns are preventing teams from embracing technology and also ultimately improving operational efficiencies. Specific to the affordable housing sector, finding money to cover cashflow gaps, particularly for energy efficiency programs, is problematic. With cash being scarce, affordable housing teams are often concerned about return on investment (ROI) and the financial commitment required to adopt tech or upgrade their systems.
Surprisingly, 99% of conference attendees still rely on Excel for their financial and operational tasks. Panelists, who are experts in the field, also confessed to using Excel extensively. It was astonishing that many of them were unaware that more advanced systems could simplify their tasks and save valuable time.
Key Takeaway #3: Finding Staff to Manage Affordable Housing Properties Is Tough
Today, finding skilled personnel to manage affordable housing properties is an ongoing issue. Even third-party managers are hard to come by in today’s climate. Affordable housing management can be difficult. Managers must adhere to regulations, track tenant income information, and know fair housing laws, tenant rights, and landlord-tenant protocols to prevent legal problems. Additionally, salary concerns contribute to the challenge of finding affordable housing staff. Consequently, these staffing challenges have forced organizations to scramble to meet their operational needs with limited resources.
The conference highlighted the challenges and opportunities in the affordable housing sector. While there are considerable concerns about expenses, cashflow, and technology adoption, it’s evident that there’s a shared commitment to providing safe and affordable housing. The CRE industry must come together to support the non-profit space and address the affordable housing shortage.
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