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How to Combat Workforce Housing Shortage in Major Metros

How to Combat Workforce Housing Shortage in Major Metros
Workforce housing is not to be confused with affordable housing. The best definition for workforce housing is “housing that is affordable to households earning 60 to 120 percent of the area median income.” However, that median may vary by state. Unfortunately, major metros still struggle with filling the gaps with workforce housing programs. Recently, housing prices have outpaced income in many major metros around the U.S., causing a housing shortage for those trying to find affordable housing close to their work. The housing crisis has been discussed extensively by politicians and economists alike. From connecting investors with developers to partnerships between building owners and tenants, creative programs can help combat the workforce housing shortage in major metros. Let's look at some of the solutions that experts feel can help keep the workforce housing shortage under control. 1. Leverage technology that helps developers build faster for less New construction technologies and structural frames may be the answer to building better and faster. Innovative materials may also prove to be more affordable without sacrificing durability and quality. 2. Remove administrative and regulatory barriers that make it challenging to build more homes and apartments cost-effectively A good place to start would be automating the local, state, and federal systems that analyze the planning and zoning codes and reducing processing time. If the processing of legal analysis could be shortened from months to weeks or days, less time and money would be wasted waiting on whether housing can be built on a particular property. 3. Pro......
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Is Investing in an Opportunity Zone Really Worth It?

Is Investing in an Opportunity Zone Really Worth It?
The main aim of Opportunity Zones is to encourage long-term investments, especially in low-income rural and urban areas throughout the country, and to boost the economy. An Opportunity Zone is an economically distressed rural or urban community that has been identified by state, local, and federal qualifications.  Opportunity Zones offer a great investment opportunity for smart real estate investors. However, investors should bear in mind the risk profile of Opportunity Zone deals, which can be much higher in some targeted census tracts than the exchange. The key is to stay diversified while taking advantage of the capital gains tax relief that is available through the program. On the other hand, if investors remain diversified, there may not be enough funds flowing to these vehicles.  Only time will tell if this latest program will succeed in identifying the areas that will benefit most from the subsidy, as well as in overcoming the issues that have limited the effectiveness of similar initiatives. Although this concept sounds socially responsible, investors are only delaying or deferring their capital gains taxes.   This program could be good for investors in the sense that it lowers their capital gains taxes, but whether or not it’s going to be good for the people in those communities is still to be seen within the next decade. However, waiting may not be the best move for investors, since these assets are as cheap as they’re ever going to be.  Opportunity zones offer three benefits that make real estate attractive to professional inves......
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Multifamily Industry Pushes Construction Starts Past Million Mark

Multifamily Industry Pushes Construction Starts Past Million Mark
With all of the multifamily construction projects taking place serving as an indicator of just where the housing market is heading, for the first time since the recession, nationwide housing starts have bumped past the million-unit mark. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau report that in total, production was up 15.7% month-over-month and up 21.7% over this same time last year. Translation, the seasonally adjusted annual rate of housing starts hit 1.09 million units in July and it's due entirely to the 39.6% increase we've seen in multifamily starts. Experts agree that single-family home builders are still hesitant to push for new construction expansions due to the fear that a lack of available credit and potential economic uncertainty will hinder would-be buyers from purchasing. These same experts also agree that because of this sentiment, demands for new apartment construction continue to grow. While single-family housing starts saw a minimal increase of only 0.8% or a seasonally adjusted annual rate of 649,000 units, multifamily is on pace to surpass even pre-recession production with an increase of 39.6% or an adjusted annual production of 423,000 units. Economists are encouraged by the growth in multifamily because they see the current demand for new units as a sign that more young adults are branching out and forming their own households, a trend which will one day help to boost the demand for future homeownership. National statistics show that this growth isn't focused on any one part of the country and instead......
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Top Dog: Multifamily Remains Construction's Hottest Properties

With all the construction that the real estate industry has endured in the last decade, it looks like one sector has risen above all others to claim the top spot in development coming out of the recession: multifamily. As the demand for new apartment units surges and rents for those units are projected to rise for a fifth straight year, experts speculate that even with a ton of multifamily construction breaking ground it’s unlikely that we’ll see any real relief anytime soon. So, even with the 6% rise in apartment rents that we saw take place over the last decade and the accompanying 13% drop the average renter saw in their income, we’re still seeing more first-time and returning tenants looking to rent. These renters are not only seeing multifamily as a financially viable solution to their living needs, but also as a lifestyle choice that puts them in a community that affords them proximity to both work and play. A growing trend that we can expect to do nothing but thrive in the upcoming years. That’s also why we’ve seen multifamily construction spending continue to increase throughout the first half of 2014. The idea of multifamily becoming the hottest sector in the real estate industry really boils down to the shifting job market. The lack of access to available credit and the struggles in the employment sector have taken ownership off the table for a majority of Americans. Also, as job markets begin to return, we’re seeing more urbanization as these new employment opportuniti......
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