Investors - JUNE 27, 2022

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ESG focus supports investment in affordable housing

by Loretta Clodfelter

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

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