Affordable Housing Anyone?

Question

https://www.bizjournals.com/co...

Kent Leach · Answer

@Steven J. Umaña It's amazing how little interest there is in affordable housing.  For the last year it has been a focus of mine. There's no doubt there is a need.

As usual, when the government gets involved the process get confusing and convoluted.  I'm the developer of a LIHTC deal currently in TN.

I can tell you it isn't easy and you need a team of knowledgeable professionals to do these deals.  And you better have a stomach for uncertainty and confusion.

Some partners and I have some concepts we are working on to develop affordable units privately. Building costs are the biggest deterrent. Advanced building technology hasn't decreased overall cost.

Whomever solves this problem will have opportunities everywhere.

Steven J. Umaña · Answer

@Kent Leach thanks for the input. I represent developers of LIHTC property in Ohio and one of my go to sayings with how these deals work is "hurry up and wait." It's like Texas Hold Em at times - hours of boredom and moments of terror. I actually had a client begin to explore LIHTC deals in TN and I've heard the housing authority in TN has some stringent requirements (more so than Ohio) for awarding credits, etc. Just scratched the surface, but it seems like to get in the door you almost need a TN based nonprofit who has also received 8609s?

@Steven Wilson Have you ever heard of folks using storage units or similar alternative construction methods? That link you sent is unbelievable! Order a house online!

Steven Foster Wilson · Answer

Doing a shipping container house actually cost more then a framed house. Because you still have to frame and insulate.

Steven Foster Wilson · Answer

https://www.alibaba.com/countr...

I foresee housing becoming a Chinese manufactured product, like everything else in the world.

However with affordable housing there is a BIG HICCUP to get over. While housing costs, material costs can be low, the land will never get cheaper! If the land is cheap, nobody wants to live there. If someone wants to live there, its probably expensive and the owner will try to get top dollar!

Rob Pattison · Answer

I know the owner of an apartment complex in coastal southern California, near the Long Beach area.  There are approximately 30 units, rent is below market, and within approximately 20 minutes walk to the beach.   The owner is looking to sell, if anyone is interested, let me know and I'll send the contact info.

Matt J. · Answer

Do you have any resources you'd recommend for someone to get started?

Steve Morris · Answer

"I think tax credits are a pain and there has to be a better way."

First off, the 9% tax credits are incredibly competitive since there is a limit on how many the state can issue annually.  Plus you'll need to hire an atty and lots of hours.

Call your local govt planners and housing authority.  If you really want to build something with an income restriction, they may have grants or waive dev fees in return.  Read and understand them before you sign anything.

Canesha Edwards · Answer

@Kent Leach

I’m a smaller developer  looking to solely provide affordable housing privately. I think tax credits are a pain and there has to be a better way.  I’m in pre-development on a small ground-up townhome project.  I was able to save on upfront cost  by deferring a percentage of the land cost until after the property’s stabilized.  I’ve also heard other developers getting a break on impact fees for making so many units affordable.

I’ve been looking at modular housing for a while but I’ve heard more and more there aren’t any real cost savings here and the benefit is more around time.  I’m interested to hear what other developers are doing to keep cost low. Affordable housing is definitely something that we need more of.

Happy Investing!

Canesha

Steve Morris · Answer

OK< not getting the point.

1) There's funds to build LIH with

2) It'll be expensive since everyone wants to make them grade A at low rents.

3) There'll never be enough "affordable" housing since 95% of renters think they're paying too much.

Affordable Housing Anyone?

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