The affordable housing segment has seen strong demand from investors, some of it driven by investor demand for investments with environmental, social and governance (ESG) aspects.
“With a large focus on affordable and workforce housing, there are many borrowers and investors looking to acquire existing affordable properties as well as convert market-rate assets to properties encumbered with rent and/or income restrictions — these restrictions have taken different forms, some are sponsor initiated, possibly to appeal to an ESG-focused equity partner,” said Liz Diamond, managing director – head of affordable originations at Berkadia, in an interview with IREI.
Diamond added that investors recognized the stability of affordable housing assets’ occupancy and income during COVID-10, due to strong state and federal subsidies, particularly Section 8, which provides vouchers and project-based contracts.
“We have also seen an increased focus on affordable and