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Many US Cities Need More Affordable Housing

There has been a big boom in multifamily, but high construction costs make it difficult to create units for seniors, workers and new graduates.

By Brian J. Rogal | brianjrogal | Updated on October 17, 2017

chi-EastParkSRO1 (2) The Habitat Co. has managed this affordable community in Chicago’s East Garfield Park for more than 20 years and acquired it this year.

CHICAGO—By most metrics, the US economy is doing very well, and across many sectors, the commercial real estate industry has profited. Construction starts are up, vacancy rates are headed down, and rental rates are on a steady march upward. At NAIOP’s CRE.Converge 2017 conference, held in Chicago last week, more than 1,500 participants heard about these hopeful trends, and how their businesses could benefit. But just as certain regions and metro areas still struggle to take part in the economic boom, portions of the real estate industry are perhaps not receiving the attention they should, and NAIOP also wanted to shine a light on these problems.

One of the most vibrant sectors in real estate has been multifamily, but after running the numbers, many developers have understandably opted to concentrate on luxury rentals in strong urban cores. Unfortunately, few have decided to build affordable housing, and subsequent shortages may strain many housing markets.

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