Virtually all of its population recognizes the United States suffers from a lack of affordable housing. Despite this trend, most institutional investors have not thought about affordable housing as an investible, nonconcessionary (“concessionary” as used herein refers to below-market rates of return) asset class that offers attractive risk-adjusted market rates of return. Moreover, as we may be reaching the end of an economic cycle, most institutional investors are unaware of the strong recession-resistant characteristic of the asset class.
Most discussion about affordable housing includes public housing owned and managed by governmental entities, and for-sale housing. For the purposes of this article, both are excluded. This discussion will focus exclusively on affordable rental housing owned and operated by the private sector, or highly experienced not-for-profit entities dedicated to the development, ownership and preservation of the asset class.
The his