Affordable Housing: Investing for Profit

Successful real estate investors are more than just landlords. They can also be savvy business executives. Property investors operate much like portfolio managers and business managers, focusing on maximizing profits while creating value for clients. Investing in affordable housing is a business and an investment strategy. 

What Is Affordable Housing?

The U.S. Department of Housing and Urban Development (HUD) defines affordable housing as homes where “the occupant is paying no more than 30% of gross income for housing costs, including utilities.” As a measure of gross income, this definition is meant to measure affordability for those at the median household income or below, though these figures can change drastically across and within different geographic areas of the U.S.

Here are other key aspects of affordable housing:

  • Diverse forms: Affordable housing is a broad umbrella term that covers different ways people access financially reachable places to live, including public housing, subsidized housing, rent-controlled apartments, low-income housing tax credit properties, housing provided through nonprofit organizations, or community-based initiatives to maintain and create further housing units affordable to people with lower and middle incomes who live there.
  • Economic benefits for communities: Affordable housing can play an essential role in maintaining communities over time and have significant economic benefits. These can include construction jobs needed to build affordable homes, enabling residents to live closer to where they work, and keeping housing costs down so that money can go elsewhere in the community, whether to pay for necessities like food or local goods and services.
  • Government assistance for some types: Many affordable housing programs are supported by government initiatives, which could include subsidies, tax incentives, or zoning laws that encourage the development of affordable units.
  • Incentives for investors: Property owners may receive tax credits if they use a percentage of their property as affordable housing, for example, by setting aside a given number of rental units in a building. The provision of affordable housing also plays a role when municipalities review bids for selling properties or reviewing zoning permits for building construction.
  • Public-private initiatives: Affordable housing projects frequently involve collaboration between public and private entities to address the housing needs of different communities.
  • Quality of life: When discussing affordable housing, stakeholders also focus on the quality of life residents would have, including proximity to public transportation, jobs, schools, and healthcare.

Here are some of the demographic groups of people frequently highlighted in discussions of affordable housing:

Adults Age 65 or More

Older adults, those aged 65 or more, represent a significant and growing segment of the U.S. population. A 2023 study by Harvard University’s Joint Center for Housing Studies reports that since 2012, the population of those 65 and over grew 34%, from 43 to 58 million. Meanwhile, 27% of all U.S. households are headed by adults in this age group. This demographic shift underscores the increasing demand for housing tailored to the needs of different subsets of this age group.3



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