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Factors Compressing Affordable Housing Pipeline in 2021 Likely to Resolve in 2022

 

 

In 2021, supply chain issues, increased costs, wage inflation and the logistical challenges of completing projects compounded to negatively impact the affordable housing pipeline.

According to Gregg Gerken, head of U.S. Commercial Real Estate with TD Bank, 2022 looks fantastic for the affordable housing sector as those issues are beginning to resolve. However, he notes that the affordable housing sector is still challenged by delays related to financing challenges, among other factors.

Demand for affordable housing, federal level commitments to the sector and the continued involvement of Fannie Mae and Freddie Mac are all positive factors for the outlook of affordable housing.

However, Gerken notes, “Financing is somewhat challenged by gaps in funding. With pricing and costs going up, there’s a gap between how much a project might support from a loan side versus how much in tax credits are allocated to that project during the last round of allocations. Some of that gap between overall costs and the funding sources is being made up as local agencies put in additional money in order to get affordable housing done.”

Hear what Gerken has to say about the development of workforce and affordable housing and the involvement of  government-sponsored enterprises (GSEs) to provide more capital in this sector.

This video is posted as part of REBusinessOnline’s Finance Insight seriesClick here to subscribe to the Finance Insight newsletter, a four-part newsletter series, followed by video interviews delivered to your inbox in February.

 




Content Partners
‣ Arbor Realty Trust
‣ Bohler
‣ Lee & Associates
‣ Lument
‣ NAI Global
‣ Northmarq
‣ Walker & Dunlop

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