RAAM Construction: Affordable Housing Is a Bright Spot in a Sea of Uncertainty

The multifamily sector has not been exempt from the impacts of the pandemic. While the sector hasn’t been rocked in the same way as hotels and retail assets, multifamily has suffered from reduced rent collections, negative rent growth and declining occupancy rates. There is one bright spot: affordable housing.

“Multifamily is one of the sectors that has thrived throughout the pandemic and is continuing to thrive despite unforeseen circumstances,” Richard Lara, founder and president of RAAM Construction, a leader in affordable housing construction, tells GlobeSt.com. “While the situation continues to evolve day-by-day, making it difficult to pinpoint the true impacts of COVID-19 on multifamily in the short and long term, the affordable housing construction and development sector does offer a bright spot in a sea of uncertainty.”

The segment of the market has maintained stability and strong fundamentals through the worst of the pandemic. As the market begins to recover, affordable housing fundamentals will continue to improve. “Fundamentals for affordable housing are consistently favorable, and there’s every indication that development of this product type will only increase in the current economic environment,” says Lara.

In terms of new construction, Lara expects healthy activity through 2021. “Throughout the pandemic, we have remained extremely active and have continued to bring projects to the finish line,” he says. “Looking ahead to 2021, we expect that same momentum to continue. As the demand for affordable housing continues to grow, we anticipate that business will continue to remain steady well into 2021. Once recovery hits for these materials, we expect that the supply chain will rebound quickly and our many projects that are already lined up for 2021 will continue at full speed ahead.”

However, challenges that impact the entire industry will also affect affordable housing. This includes increasing materials costs. This isn’t a roadblock to moving projects forward. “While the access to materials has been slightly difficult over the last several months due to the pandemic, we were still able to complete two large development projects in Pasadena, California,” says Lara. The two projects are Decker & Gill Court, a historical preservation project that consists of 16 two-story townhomes, and Marengo Townhomes, consisting of 12 luxury two- and three- story townhomes.