Fall 2017 issue of Horizons

The decision of older households to age in place will require additional accessible housing that also offers supportive services. While the demand for units increases, it is coupled with an affordability crisis. According to the State of the Nation’s Housing 2016 , the demand has increased across all income levels, however approximately half of the growth consisted of households making less than $25,000 annually. In the report, the Joint Center for Housing Studies noted that the amount of renters with severe burdens (those who pay more than 50% of their income on rent) rose by 2.1 million to a record 11.4 million last year.

The problem, in many cases, is that higher- income households are occupying the affordable units, putting pressure on the government to find alternatives to help low- income renters. With all of the uncertainty in Washington, the role of immigration as it relates to household growth is uncertain. If the number of immigrants allowed into the country is decreased, this could translate into lower annual household growth. Over one-third of total household growth from 1995 to 2015 was contributed by immigrants. While immigration into the U.S. decreased from 2015 to 2016, it is still above the annual average immigration figures of 2009 to 2011 by 150,000 people. The number of households moving continued to decline in 2016. The percentage of people changing residences in 2016 was 11%, the lowest figure in the past 40 years according to the current population survey. According to the American Housing Survey there were 5 million fewer moves in the rental markets in 2015 compared to 1997. The largest decline in households moving was for adults under age 35. Tax Reform With the prospect of corporate tax reform looming over the affordable housing industry, some of its effects are already being felt. Bank financing for affordable housing projects are being delayed causing much needed projects from being started. Once there is more clarity from Washington, financing should begin to free up for much needed affordable units. Multi-family Outlook, we can expect 2017 to be another good year for the multi-family housing market. “A greater amount of new supply will be delivered to the market in 2017 but most of it will be absorbed, given continued economic growth and strong multi-family fundamentals. Looking Forward According to the Freddie Mac

Average Monthly Rent per Unit

$1,000

$949

$897

$900

$806

$766

$780

$800

$802

$700

$750

$735

$699

$702

$600

$500

2012

2014

2016

2013

2015

Economic Occupancy

95%

92.1%

90.8%

92%

90.0%

89.1%

88.6%

89%

90.7%

86%

87.3%

86.2%

85.8%

85.0%

83%

80%

2015

2014

2012

2013

2016

GOVERNMENT ASSISTED

MARKET RATE

Source: RubinBrown Apartment Stats, 2017

It’s a Record Period of Growth for the Multi-Family Industry

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