Affordable Housing
Entering real estate investments, investors typically turn away from affordable housing due to a reasonable assumption that they will not profit as much. However, offering affordable housing is beneficial, price effective and will help your brand in the long run.
On May 20, 2021, Gavin Newsom signed legislation in order to increase affordable housing in California. Newsom’s proposed plan is aimed to fund and place individuals experiencing homelessness into housing. Of the 250,000 individuals that want affordable housing, 46.8% are unable to access assistance. Due to Newsom’s rapid changes, we project that affordable housing will be required in future projects and it is best to anticipate policy changes in investments now. Regardless, current policies benefit investors that plan to develop while including affordable housing. It is well known that the permit process is time consuming, so utilizing one of two expediting processes is important to not waste time. An investor can either pay expensive expediting fees or include affordable housing. Investors should in fact choose the affordable housing option because this option will offer reliable return on investments, consistent cash flows and tax incentives.
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Ronad Medon
Investors should not be concerned about Newsom’s policy changes if they include affordable housing in their projects. Affordable housing in projects will overall benefit investors in the long run. Benefits include safety and stability in the investment and is overall great for the community.