NMHC’s New Resource Center Aims to Increase Workforce Housing
- Aug 26, 2008
By Anuradha Kher, Online News EditorWashington, D.C.–The National Multi Housing Council (NMHC) recently launched an online Workforce Housing Resource Center, including an interactive project estimator tool that allows real estate firms and policy makers to evaluate the financial viability of proposed “workforce housing” apartment properties. “The lack of affordable housing for service workers, healthcare workers and first responders is a well-known problem with no easy solution,” says Doug Bibby, NMHC president. “In a perfectly functioning market, housing providers would simply increase production to meet the tremendous demand for what is generally referred to as workforce housing. But housing is far from a perfectly functioning market. High land and construction costs, regulatory barriers and local impact fees make it virtually impossible to build, rehabilitate and operate apartments at rents affordable to these workers in any mid- to large-size metro area.” Localities that want workforce housing–and developers who want to provide it–have to find creative ways to bridge the gap between construction costs and affordable rents. In some cases that means project subsidies. In others, it simply requires expedited permitting or density bonuses. NMHC’s project estimator functions like a commercial real estate underwriting system, and allows users to evaluate the financial viability of a project under different scenarios.Users enter a project’s financial pro forma data into the estimator and can then apply a wide variety of incentives common in public-private partnerships, such as tax abatements, expedited permitting, direct public investment and others to the project to determine what combination is necessary to make the project financially viable. “We had two goals in creating this tool,” notes Bibby. “The first was to help the private sector find ways to meet the growing demand for workforce housing. Given the tremendous demand for this product, there are many firms that would consider moving into the workforce housing market if we can help them figure out how to make the numbers work.” The other reason, he explains was to educate local officials and leaders who are responsible for solving their community’s housing shortage but do not have backgrounds in housing finance. “The NMHC project estimator represents more than a year’s worth of work,” says Bibby.In addition to the estimator, the new Workforce Housing Resource Center also includes a comprehensive library of affordable housing resources and links, including toolkits for developers and localities, as well as detailed case studies of successful workforce housing projects.