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The Untapped Value of Workforce Housing

While many cities attempt to tackle the workforce housing issue through legislation and subsidies, private real estate markets can and should allocate more capital than they currently do to the sector, writes EquityMultiple's Soren Godbersen in this EXCLUSIVE commentary.

By Soren Godbersen | Updated on October 05, 2017

Photo of Soren Godbersen “An adequate supply of workforce housing not only helps lower-income renters, but also has a broader positive social impact.,” writes Godbersen.

NEW YORK CITY—America’s cities and suburbs are in the midst of a gradually worsening workforce housing crisis. Urban and suburban populations continue to rise, while wages have essentially stagnated for moderate and middle-income households over the past two decades. With homeownership rates dropping to the lowest figures since the 1960s and many upper-middle-class professionals preferring to rent in urban cores and transit-rich suburbs, rents continue to rise in markets across the country.

Developers have largely responded to this demand by building class A units, but this has done little to meet the shortage of affordable rentals. Nationwide, only 65 affordable units exist for every 100 low-income renters[1].

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