The good news: New apartment properties are being built in response to the growing demand for multifamily rental housing.
The bad news for many renters: The majority of the new properties cater to higher-income renters, The Wall Street Journal reported recently. Meanwhile, apartments that are considered affordable to middle- and low-income renters are in short supply. More than half of all renters are cost burdened; that is, they pay more than 30 percent of their income on housing. The burden is much greater among low-income renters.
According to the article, real-estate research firm CoStar Group Inc. found that 82% of the 370,000 multifamily rental units completed from 2012 to 2014 in 54 U.S. metropolitan areas were luxury apartments (with rents in the top 20 percent of the local market). Almost all of the new multifamily construction in Atlanta, Baltimore, Denver, Phoenix, and Tampa fits this description.
The percentage of households renting their homes has risen for several years in a row – not only for economic reasons, but also because of changing preferences and demographics. The trend is expected to continue for years to come. A Harris poll commissioned by Freddie Mac Multifamily offers a profile of today’s renter.
Freddie Mac Multifamily supports the entire multifamily rental market from coast to coast. About 90 percent of the properties that we finance are affordable to renters earning low to moderate incomes. To expand our support for affordable housing, we introduced three new offerings in 2014:
- Small Balance Loans, ranging from $1 million to $5 million and mainly intended for properties with five to 50 units
- Tax-Exempt Loans
- Manufactured Housing Community Loans
- "Affordable Housing Out of Reach for Many Americans" (Affordable Housing Finance, May 19, 2015)
- "Executive Perspectives" posts by Freddie Mac Multifamily EVP David Brickman
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