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Affordable housing is among the most in-demand real estate asset classes, but the cost of housing and limited apartment stock has diminished the supply of affordable properties. Technology is one among many potential solutions to increase the supply of affordable housing by creating operating efficiencies that can help to increase the return on affordable assets. However, because affordable housing is already a challenging asset class, can affordable operators absorb the cost of new technologies?
Jerry Cohen of AppFolio says yes. "Modern cloud software has become so much easier to use that the time for setup and training is not a material consideration anymore," Cohen, lead product manager at AppFolio, tells GlobeSt.com. "The technology investment can see immediate savings in staff time and other costs."
Affordable housing is a niche asset class, and operators need to be well versed in legislation and regulations. According to Cohen, software gives operators visibility into what's happening holistically and creates better communication across multiple sites or even across a portfolio. Cloud software makes this possible and keeps everyone in compliance with law.
While there is a cost to investing in cloud software, Cohen estimates that property managers spend more time on administrative costs. "Some property managers spend more per month shipping compliance files from office to office than they would pay for software," he says. "Also, the possible compliance fines can be so severe that they could easily dwarf years of total technology costs."
Overall, the investment in new technologies will offset the cost. In addition to preserving the supply of affordable housing, it can also help new investors enter the market. "I think technology offers an excellent incentive to get into the affordable housing program property segment," says Cohen. "Sure, there are already incentives to invest in affordable housing and build affordable housing, but due to the compliance overhead, managing these properties has been less profitable for property managers. With the birth of new technological innovations that help make managing affordable housing programs easier, more property managers and developers will likely enter the space."
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Kelsi Maree Borland
