Throughout much of the past bull market, it was the use of historically excessive leverage in a historically low interest rate environment that drove up prices to all-time highs and drove cap rates to all-time lows. As we’ve noticed this past year, during which losses for our heavily leveraged financial institutions have reached unheard of levels and continue to mount, leverage cuts both ways. When the bubble bursts, the same system that facilitated extraordinary heights yields depressing lows.

Workforce housing has become an increasingly popular agenda item among urban planners, government administrators and housing activists, who hope that by providing units with designated mid-market rents, they can attract and retain teachers, nurses and municipal workers in their cities. In recent years, institutional investors, too, have endorsed workforce housing projects and, in doing so, found socially conscious profits in the investment. The onset of the credit crisis, however, has been a game changer for this property type.

In the first of several U.S. government economic interventions, the Federal Housing Finance Agency took Fannie Mae and Freddie Mac into conservatorship in September, wiping out shareholders but guaranteeing the companies’ debt in order to save them from collapse. Now in the government’s hands, the companies have taken steps to keep mortgage borrowing costs low. Meanwhile, investors are left wondering what all this means for them.