Early answers to pressing questions in Attainable Housing

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

Construction Cost and Financing Cost. Today, most developers building to retail construction costs and banking on top-of-market rents are pushing to achieve unlevered yields in the low 6% range. These thin margins leave little room for error, rendering many projects unviable for debt financing or LP equity. The numbers just don’t pencil out under traditional underwriting, and in our view, simply to not make sense.

With Hillpointe’s fully integrated development model, we tightly manage costs, target unlevered yields on cost of approximately 8%, and can secure financing where competitors falter. This positions us exceptionally well to deliver attainable housing in today’s market. We’re increasingly excited by the opportunities unfolding for our current pipeline.

Zoning and Regulation. Many cities have restrictive zoning laws that limit density. Permitting processes are often slow and expensive, too, with fees and delays piling on. NIMBYism compounds this problem and further stalls progress.

2. How are developers and policymakers working together to create more affordable housing options?

Florida Senate Bill 102, known as the "Live Local Act," was signed into law by Governor Ron DeSantis on March 29, 2023, and took effect on July 1, 2023. The Live Local Act 2023 has been dubbed the largest investment in housing in Florida history, creating a massive opportunity for multifamily attainable workforce housing developers. The law tackles housing shortages through several key measures: it prohibits local governments from imposing rent controls, offers tax incentives like property tax exemptions and sales tax refunds for developers building affordable units, and overrides local zoning rules to allow multifamily housing in commercial or industrial areas.

The Act provides that certain developments will be eligible for a 75 percent or 100 percent ad valorem tax exemption (also known as the "Missing Middle" Property Tax exemption), depending on the level of rent restriction for the units.

Eligible property must:

• be "newly constructed"
• contain at least 71 units in a multifamily project
• be "occupied" by natural persons below either 80 percent or 120 percent AMI
• offer rent that cannot exceed 90 percent of fair market value as determined by a rental market study

3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

Hillpointe’s ability to deliver a state-of-the-art multifamily product at a significant discount to our competitors enables us to pro-forma attainable, or workforce housing rents, and still have our projects pencil from a financial standpoint. Essentially, we create Class A quality garden-style multifamily communities across the Sun Belt, and we are able to deliver those communities at a significantly lower cost basis than other new, like-kind construction.

As a fully integrated firm we are unique on the construction side of our business. We employ a development model that differs from our industry peers in a number of ways.

First, we act as the developer, the general contractor, and we self-perform the majority of the underlying sub trades, which allows us to strip out a significant portion of the embedded fees and overhead that are typically spread across the multiple layers of contractors in a traditional development structure.

Second, in addition to performing as the general contractor and self-performing sub trades, we source the majority of our materials direct from the manufacturer on a bulk basis. By cutting out middlemen in the distribution channel, we can significantly reduce the cost of building materials.

Third, we operate a widget model and we build the exact same building types on every project.

4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

To make housing more attainable through zoning, two key adjustments stand out. First, increase the amount of land designated for reasonable-density multifamily housing. Second, limit ancillary requirements that inflate construction costs—like excessive parking mandates, large setbacks, or pricey design standards. Together, these changes prioritize supply and affordability while keeping development practical and scalable.

Finally, streamline permitting and approvals. Cut red tape by fast-tracking affordable/attainable projects or setting firm deadlines for reviews.

5. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

Private developers build the bulk of housing stock in the U.S., over 90% of new homes annually.

6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

Political appetite is growing—Florida’s Live Local Act (2023) is a blueprint—though NIMBY resistance will slow the pace.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

• High land costs
• Stringent zoning regulations
• Lack of government innovative policy and funding beyond traditional market sales (ownership), market rental and subsidized rental.
• Slow and expensive construction process
• NIMBYism (Not In My Back Yard) opposition

2. How are developers and policymakers working together to create more affordable housing options?

• Public-private partnerships
• Inclusionary zoning
• Density bonuses
• Tax incentives for affordable housing development
• Streamlined permitting processes
• Complete transparency on costs, profits and revenues for all at the table

3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

• Govt policies at municipal level that provide fee breaks or elimination for attainable homeownership
• Govt funding at provincial and federal level investment - NOT SUBSIDY - in models that provideo both financial returns and social impact around attainable and incremental homeownership
• Modular construction
• University land owners who want to explore attainable homeownership for staff
• Government investing land into win win ownership deals along with indigenous groups

4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

• Increase density limits
• Faster permitting
• Low or no fees
• Allow for mixed-use development and gentle density
• Create more streamlined permitting processes
• Offer incentives for attainable housing development

5. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

• Transparently approach governments with your financial model
• Be open to retain equity in your market sales developments and offer on attainable basis alongside governments and 3 party partners, E.g. Don’t expect just to build and sell
• accept lower return for attainble homeownership developments. focus on volume vs maximzing profit per development
• Advocate for policies that support attainable homeownership and wealth creation
• Collaborate with nonprofits and government agencies on attainable housing initiatives

6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

• Increasing demand for attainable homeownership
• Millennials demanding to own homes again and reviving that dream
• Changing demographics esp immigration
• Self employed workers demanding to own homes
• Employers viewing homeownership as a benefit , not just a problem of their employees

1. What do you see as the biggest barriers to increasing attainable housing in today’s market? Regulations, zoning and political will.
2. How are developers and policymakers working together to create more affordable housing options? Tax incentives.
3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable? LIHTC, CRA requirements, public/private partnerships.
4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments? Less regulation and less restrictive zoning would increase the development of housing across the multifamily spectrum. More supply means lower prices to own or rent. Focus should also be on transit-oriented development with local and state governments providing incentives (and sticks) to promote it. This is a political problem. Objectively, people worried about property values declining due to affordable housing development should be less concerned about TOD because more valuable properties are usually removed from proximity to transportation hubs (except, perhaps, in NYC).
5. What role does the private sector play in bridging the gap between supply and demand for attainable housing? More efficient at development than the public sector.
6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing? When police, fire, medical staff and teachers (or the like) live too far away to service local municipalities, cities and towns will have to come up with a viable solution. We worked on a deal in CA that was market-rate yet specifically targeted at such households.
7. What do you see as the biggest barriers to increasing attainable housing in today’s market? Regulations, zoning and political will.
8. How are developers and policymakers working together to create more affordable housing options? Tax incentives.
9. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable? LIHTC, CRA requirements, public/private partnerships.
10. How can zoning laws and regulations be adjusted to encourage more attainable housing developments? Less regulation and less restrictive zoning would increase the development of housing across the multifamily spectrum. More supply means lower prices to own or rent. Focus should also be on transit-oriented development with local and state governments providing incentives (and sticks) to promote it. This is a political problem. Objectively, people worried about property values declining due to affordable housing development should be less concerned about TOD because more valuable properties are usually removed from proximity to transportation hubs (except, perhaps, in NYC).
11. What role does the private sector play in bridging the gap between supply and demand for attainable housing? More efficient at development than the public sector.
12. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing? When police, fire, medical staff and teachers (or the like) live too far away to service local municipalities, cities and towns will have to come up with a viable solution. We worked on a deal in CA that was market-rate yet specifically targeted at such households.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market? The biggest barriers to attainable housing include the cost of construction, which might be even more difficult if tariffs on materials remain in place, the growth in expenses such as insurance and labor, and the extended entitlement process which lengthens construction times.
2. How can zoning laws and regulations be adjusted to encourage more attainable housing developments? Municipalities should allow more density, especially near transit, be open to adding accessory dwelling units, ease requirements for things such as parking and streamline the entitlement process.
3. What role does the private sector play in bridging the gap between supply and demand for attainable housing? Private sector developers must be open to including affordable units in market-rate projects, which involves making use of tax credit and loan programs that facilitate development of low-cost housing. Also private developers should explore technologies that produce less costly construction options such as prefabricated units or 3D printing.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market? Insurance costs, construction costs and lack of private activity bond volume cap
2. How are developers and policymakers working together to create more affordable housing options? For the first time in many years, we are starting to see local governments (cities and counties) provide soft funding for affordable housing projects. These soft funds (ARPA funds, Housing Trust Funds, Workforce Housing Funds, etc.) are structured as subordinated loans that are soft pay. In most cases, without soft funds, projects would not be feasible
3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable? Outside of the low-income housing tax credit (LIHTC) program, we have been working on other structures to deliver affordable housing such as essential function funds (EFB) and 501(c)(3) bonds, both of which do not require private activity bond volume cap. EFB are government bonds issued by public housing authorities to finance the acquisition or new construction of affordable or workforce housing projects. Because a public housing authority is a government entity, they are exempt from property taxes, which results in a higher NOI to support more debt. 501(c)(3) bonds are issued by a government conduit issuer the proceeds of which are loaned to a qualified 501(c)(3) organization to finance the acquisition or new construction of affordable or workforce housing.

Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

Looking ahead, the future of attainable housing will be shaped by policies that enhance public-private partnerships, streamline zoning and entitlement processes, and expand financial incentives for developers. Historically, affordable housing has relied on significant federal and local government subsidies, including Low-Income Housing Tax Credits (LIHTC), property tax exemptions, and rental assistance programs. The success of these initiatives depends on stable funding, regulatory flexibility, and market-driven incentives to attract private capital.

To accelerate development and improve market liquidity, states should consider scaling policies similar to Florida’s Live Local Act, which removes zoning barriers, offers tax incentives, and expedites approvals for mixed-income housing. Expanding such by-right zoning policies nationwide could drive multifamily development in high-demand areas while preserving long-term affordability.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

The primary barriers stem from structural inefficiencies in capital flow, outdated zoning policies, and the high cost of development. The current system relies too heavily on subsidies like LIHTC, which are slow-moving and fail to scale. Meanwhile, institutional capital is sitting on the sidelines because there isn’t a clear, investable pathway into workforce and attainable housing.

Additionally, most current models don’t align long-term affordability with financial viability, creating a fundamental misalignment between housing providers and investors. To truly move the needle, we need an approach that unlocks private capital efficiently, reduces development friction, and prioritizes operational excellence to keep housing accessible without ongoing subsidies.

2. How are developers and policymakers working together to create more affordable housing options?

The most effective collaborations recognize that housing is an economic driver, not just a policy issue. Some cities are beginning to incentivize private capital to enter the space—whether through streamlined approvals, flexible zoning, or tax-efficient structures.

However, the real progress happens when capital and compliance align in a way that reduces risk for investors and accelerates housing production. Emerging models are proving that a market-driven, compliance-conscious approach can scale faster than traditional subsidy-heavy solutions. When cities work with investment-backed operators who understand both regulatory constraints and financial structuring, we see a new level of efficiency and execution in attainable housing.

3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

Some of the most effective strategies involve capital structuring that allows private investment to flow into attainable housing without the need for heavy government intervention. Models that integrate:

• Institutional investment with affordability benchmarks, ensuring long-term accessibility while maintaining returns.
• Infill redevelopment, where underutilized assets are converted into high-quality housing without prohibitive land costs.
• A diversified buy-box approach, allowing for a mix of acquisitions, build-to-rent, and workforce housing preservation to balance risk and reward.

What’s working is not just finding new financing tools—but redefining how attainable housing is structured as an investment class. The most effective solutions are those that create scalable, repeatable processes that align with institutional capital mandates while ensuring long-term affordability.

4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

The simplest and most effective zoning reforms focus on unlocking density, accelerating approvals, and removing outdated restrictions that make housing more expensive to build. The most impactful changes include:

• As-of-right zoning for attainable housing, eliminating unnecessary delays.
• Adaptive reuse incentives, making it easier to convert commercial properties into residential units.
• Support for small-scale, scattered-site rental housing, which creates high-quality rental opportunities in areas traditionally reserved for single-family ownership.
• Cities that take a flexible, investment-friendly approach to zoning will attract more capital and create housing at scale. The key is balancing regulatory clarity with market-driven solutions—because when investors have certainty, housing gets built.

5. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

The private sector is the only entity capable of delivering attainable housing at the scale needed to meet demand. Governments and nonprofits play critical roles, but they lack the speed, capital, and operational efficiency to develop, renovate, and manage housing at market velocity.

Private capital wants to invest in housing, but traditional models have too many barriers—whether it’s lengthy entitlement processes, lack of operational infrastructure, or financial structures that don’t support long-term stability. The most successful solutions are those that:

Align institutional capital with attainable housing models that function like any other stabilized asset class.

Leverage economies of scale in operations, ensuring affordability doesn’t depend on ongoing subsidies.

Structure risk-mitigated investment vehicles, allowing capital to flow without government overreach or excessive restrictions.

We are entering a phase where the private sector can lead the charge on attainable housing—but only if the right financial and operational frameworks are in place. Those who can execute at scale while maintaining affordability will define the next generation of workforce housing.

6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

The future of attainable housing will be shaped by market-driven solutions that attract private capital, strategic infill development, and alternative financing models that create pathways to homeownership. The most impactful trends include:

SFR acquisitions and infill redevelopment as scalable, investment-ready solutions. The greatest opportunity in attainable housing lies in acquiring, revitalizing, and efficiently operating the inventory most in need of reinvestment—particularly single-family rentals (SFR) and scattered-site infill properties. Instead of waiting for large-scale developments to gain approvals, strategic acquisitions of distressed or underutilized properties can immediately increase housing supply while stabilizing communities. When combined with operational efficiencies and smart capital deployment, this model allows for high-quality housing at sustainable price points.

The rise of nonprofit-for-profit partnerships. Historically, nonprofits have lacked the scale and operational infrastructure to meet housing demand, while for-profits often struggle with affordability constraints. The future lies in hybrid models that align nonprofit mission-driven objectives with the efficiency and capital access of private investment. By structuring these partnerships effectively, we can rapidly acquire and redevelop housing while maintaining long-term attainability—without depending on slow-moving subsidy programs.

Rent-to-own and private financing models expanding access to homeownership. Traditional mortgage qualifications exclude millions of working-class families due to credit restrictions and down payment barriers. Rent-to-own programs and private financing structures create an on-ramp to homeownership, allowing residents to build equity while remaining in attainable housing. These models not only stabilize families but also provide a scalable, market-driven approach to increasing homeownership rates without relying on public subsidies.

Operational and financial efficiencies reducing long-term costs. The future of attainable housing isn’t just about adding supply—it’s about making it financially sustainable at scale. Advances in AI-driven property management, modular construction, and cost-efficient underwriting are reducing both development and operational costs, ensuring that housing remains attainable without continuous public funding.

The most impactful solutions will be those that unlock capital and streamline execution while maintaining long-term affordability. When housing is structured as an investable, self-sustaining asset class—rather than a government-reliant initiative—we create the efficiency, scale, and financial viability needed to make attainable housing a reality.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

I believe there are three basic actions needed to increase the supply of attainable housing: we need to make building Cheaper and Easier, and we need to do More of it. Each one of these potential levers is stymied barriers that need to be overcome to drive the expansion of new attainable housing.

Cheaper: In the US, it costs an average of $400K to build a 2-bedroom apartment unit. With such high construction costs, owners/developers cannot cover those costs without pricing the unit at a commensurately high rate, meaning that anyone making less than $100K per year is unlikely to be able to afford it. In some cities, building “affordable” apartments is more expensive than market-rate apartments due to local or state requirements placed on those buildings. Cheaper does not mean lower quality. It means clearing unnecessary costs.

Easier: On average, it takes two years to get the approvals and permits to start construction on a new affordable multifamily project. The morass of regulations, permitting, and rules around affordable projects creates significant barriers to new projects and drives away investment. Capital tends to flow to where it is easiest (and sometimes fastest) to generate a return. Without an acceleration in the time it takes to get started on new projects, new investment will continue to flow elsewhere.

More: Our country has a 7 million unit housing shortfall. We need more high-quality, affordable rental units, period. Everything we do at Multifamily Impact Council is directed toward breaking barriers, encouraging investment, and finding creative ways to overcome challenges to get more attainable housing into communities that need it.

2. How are developers and policymakers working together to create more affordable housing options?

Labor is the single largest expense in multifamily development, often accounting for up to 40 percent of total project costs. In 2023, those costs increased by 12 percent. It is unsustainable to keep that pace and still build more affordable housing.

One driver of the high labor costs is a little-known regulation called Davis-Bacon, a wage mandate for housing projects that receive federal aid. The law requires contractors to pay the locally prevailing wage, but the method of calculating wages relies on scant and often inaccurate data that artificially inflates the required wage. For example, in California, Davis-Bacon rules can add as much as 25% to the construction cost of a single unit – ultimately reducing the number of apartments a developer can build.

Developers and policymakers can collaborate to change Davis-Bacon and other rules, decreasing costs, increasing investment, and accelerating the time it takes to build projects.

3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

Many affordable projects don’t pencil without some form of subsidy. Often, projects layer on federal, state, and local tax credits and/or low-cost loans. For the past 40 years, the most common subsidy has been the Low-Income Housing Tax Credit (LIHTC). LIHTC financing has been extremely successful, increasing the quantity of affordable housing by over 3.65 million units according to the Department of Housing and Urban Development (HUD). While LIHTC has succeeded, it has a number of drawbacks. It is a complex program that can be expensive and inefficient for investors. The credit tends to favor larger projects and puts smaller projects, that might be just as deserving of the support, at a disadvantage. Thankfully, LIHTC isn’t the only path developers are using to help finance their projects.

Innovative U.S. housing leaders—including many MIC members—are constantly looking for creative ways to help bridge the cost gaps that may arise in their projects. This commitment to innovation leads to more affordable housing in ways that aren’t possible relying just on LIHTC.

Just one case in point is Avanath’s 2022 purchase of Baldwin Village, a 669-unit apartment complex in Los Angeles California. To improve the return for their investors, Avanath partnered with the Housing Authority of the City of Los Angeles (HACLA) to convert Baldwin Village from market rate apartments to mostly income-based, affordable units and then tap into the California Welfare Tax Credit saving the project nearly $2 million in property taxes.

Attainable housing growth depends on the creativity of both developers and investors and their willingness to explore new structures and paths to achieving the returns they want besides just federal subsidy programs.

4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

Zoning is one of the biggest influences on the creation (or lack) of attainable housing. Zoning rules are implemented at the municipal level, which means that the tens of thousands of towns and cities across the US all have their own version that developers need to follow. The sheer multitude makes scaling any multifamily developer’s business extremely difficult, and increasing scale is one way of reducing costs and increasing quantity. Zoning rules don’t necessarily have to become standardized nationally but reducing them and making them more development-friendly is a good place to start.

The Pew Charitable Trust looked recently at what the city of Minneapolis did with its zoning laws. In the early 2000s, Minneapolis had highly restrictive development rules related to parking, land use, and building sizes. In 2009, the city scaled back those rules, removing parking requirements, lowering minimum lot size, and allowing ADUs. From 2017-2022, the new zoning rules led to an increase in larger-size multifamily projects. During that period, 87 percent of construction was on projects with more than 20 units. Over this period, housing stock grew 12% while rents grew by 1%. Across the rest of Minnesota over the same time, it was nearly the inverse: rents grew by 14%, while housing stock grew by only 4%.

Learning from Minneapolis's experience, better zoning regulations can positively impact the growth in housing investment and production. More housing of all kinds, including affordable multifamily, helps to make all housing more attainable.

5. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

One of the most important roles the private sector can play in bridging the gap is increasing its investment in affordable housing. This includes major investment companies, institutional investors, and corporate players as well. Through MIC, we educate investors about the financial strength of investing in more affordable housing, and the ample data which supports this.

A recent Pension Real Estate Association report highlights that affordable housing investments serve a social purpose and offer competitive financial returns, often with lower volatility compared to higher-end properties.

Affordable multifamily properties drive social impact via slower rent growth, while their steady income streams and resilience during economic downturns contribute to superior long-term performance for investors. PREA notes that since 2008, the cumulative annual growth rate (CAGR) of Net Operating Income (NOI) at affordable multifamily properties has been 5.7%,, compared to 0.7% for higher rent market-rate properties.

Attainable multifamily housing also has a strong risk profile. According to public data from mortgage guarantor Fannie Mae, serious delinquency rates for affordable properties have been consistently lower than conventional market-rate properties since 2012.

6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

With the new presidential administration, developers can expect to retain favorable tax treatment for construction projects and lower corporate taxes. Trump’s picks to lead the housing agencies have been proponents of Opportunity Zones and there is bipartisan support for favorable housing policy.

In 2023, Congress passed legislation to increase funding for the 9% LIHTC credit. The bill also proposed lower thresholds for 4% private activity bond financing from 50% of land and building costs down to 30%. The law could have paved the way for increased use of these financing tools, however, the bill stalled in the Senate.

Now is the time for housing advocates to get new funding bills passed and signed into law. With tight budget negotiations needed to find ways to pay for an extension of the 2017 tax laws set to expire, significant challenges lie ahead.

However, a policy agenda that helps developers access lower-cost financing is critical to achieving the greatest impact on attainable housing and supporting a vibrant US economy as a whole.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

I think there’s three major barriers to increasing the supply of attainable housing right now. First, is high construction costs – supply chain disruptions and inflation add to the already high cost of new construction. We don’t know yet how the proposed tariffs will affect our industry, but it could prove to be a substantial obstacle.

Second, there’s a misunderstanding on the part of many local governments about what incentivizes the building of attainable housing. I think you have to make building and owning in this market class attractive to investors and owner/operators. Instead of legislating from a strictly renter-focused perspective, focus on increasing supply through government policies that encourage broad investment in housing. For example, grant property tax abatements for housing that includes a certain percentage of units for middle and low-income households. Another method would be to prioritize quicker legislative reviews of attainable housing developer proposals/initiatives. That is what is going to help drive more supply.

Finally, NIMBYism still plagues new development of attainable housing. Even when there is a glaring need for supply, legislators are often swayed by electability concerns from the NIMBY protesters rather than act in the interests of the whole community.

2. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

The private sector plays a vital role in bridging the gap between supply and demand for attainable housing, both from a development perspective, as well as through private employers. Employer-driven housing support, through both direct investment and through employer-assisted housing programs (e.g., preferred renter programs, down payment and/or closing cost assistance) can spur an increase in the development AND preservation of attainable housing supply. Employers benefit from this support by reducing the commuting burdens on employees while at the same time providing stability to local housing markets.

A second role that the private sector can play is through the expansion of public-private partnerships. By working together with local and state government entities, the private sector’s additional capital support and personnel can advance zoning initiatives and speed up development timelines.

3. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

I’m confident that increases in rent control measures will hamper the future supply of attainable housing. Studies show time and again that such measures disincentive developers and investors from building. As the issue of housing affordability becomes more prevalent in political campaigns and policy agendas at all levels, it is imperative that policymakers work to encourage the growth of housing supply rather than enact measures that are little more than sound bites.

On a more positive note, I think the trend in leveraging technology, both in construction (e.g., modular and prefabricated housing) and in interior smart home tech, will help bridge the gap to affordability of homes for residents by lowering costs of operation, in both the reduction of long-term maintenance expenses, as well as in increasing energy efficiency.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

As a no-subsidy developer of missing middle housing, land costs as a percentage of overall development budgets are my #1 focus. How do we drive down land costs? Zoning, zoning, zoning. Cities that want to create “missing middle” housing for households earning 60–100% of AMI without subsidy have to take a hard look at minimum lot sizes, subdivision processes, and unit count restrictions. As-of-right small lot subdivision and "plex reform" (allowing duplexes, triplexes, quadplexes on single-family zoned lots) have allowed our firm to create affordable condos for 60–80% AMI households without any other subsidy.

2. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

At Up&Up, we focus on no-subsidy-required models to create access or affordability. On the access front, we profit share with our renters. There is no reason a renter cannot also be a co-investor in a property — and earn the same returns as the majority investor. We developed novel models to help renters build wealth while renting, which allows them to benefit from both cash flow and appreciation as a minority partner in their home. On the affordability front, adding density to infill lots through small lot subdivision (creating lots on 1-2 acre parcels) has opened up our ability to deliver homeownership projects for 60-100% AMI residents. Smaller lots mean smaller (and more affordable) homes, while still being economical to develop.

3. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

By-right entitlements and strong partnerships with local utility providers are the keys to unlocking underutilized land for housing.

4. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

We need creative sponsors in the private sector who can see that building and selling six starter homes on a single-family lot vs. one luxury home is a profitable business. Too often, developers get stuck in thinking they must create upscale products to be profitable. We are finding huge demand for products in that 80% AMI price point.

5. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

We’re watching the continued momentum around zoning reform at the state and local level — particularly laws that legalize small multifamily or reduce regulatory burdens on infill projects. We’re also encouraged by growing interest among institutional investors in mission-driven housing strategies, which can bring significant capital into this space.

1. What do you see as the biggest barriers to increasing attainable housing in today’s market?

Land values, construction materials, and labor costs and availability are the largest impediments. Land is no longer treated as a commodity and a value "plug" in a development budget, and it is held by longer term, patient, lower levered and intentional capital. Compounding inflated so called “hard costs” are lengthy and expensive permit fees and impact studies that burden projects and progress, generally instigating developers to build pricier product not affordable to sub-120% AMI residents. Many areas have outdated zoning laws that limit density or prohibit more attainable housing types like townhomes, duplexes, ADUs, and multifamily units. Bottom line, housing costs have largely outpaced wage growth, pushing demand up for entry-level and attainable housing.

2. How are developers and policymakers working together to create more affordable housing options?

Some cities are updating zoning codes to allow for higher-density housing, and accessory dwelling units (ADUs). Some jurisdictions are eliminating single-family zoning to encourage duplexes, triplexes, and multifamily housing. To date, there has not been broad enough adoption.

3. What innovative strategies or financing models have you seen successfully implemented to make housing more attainable?

Community Land Trusts (CLTs), Public Facility Corporation (PFC), and the like offer property tax exemptions to developers in exchange for affordable housing; these government organizations ensure long-term affordability by retaining ownership of the land and leasing it to landlords. This model helps stabilize communities and prevent displacement. However, these programs need to be expanded to accommodate townhomes, duplexes, and additional single-family lifestyles as multifamily is often not a universal solution for families.

4. How can zoning laws and regulations be adjusted to encourage more attainable housing developments?

Broadly increase density allowances; upzone areas to allow for multi-family housing, townhomes, and accessory dwelling units (ADUs). Reduce single-family zoning restrictions to permit duplexes, triplexes, and fourplexes. Allow smaller lot sizes and reduced setback requirements to enable more compact, cost-effective housing developments. Streamline or expedite the approval process for affordable and attainable housing projects by implementing “by-right” zoning for certain housing types to eliminate lengthy and costly discretionary reviews. Reduce impact fees for developers building explicitly affordable or attainable housing. GSE loan programs should expand to offer construction financing and bridge debt as a way to substantially increase "attainable" supply while facilitating projects to earn a financial return.

5. What role does the private sector play in bridging the gap between supply and demand for attainable housing?

Problems of this size and scale require the enormity and ingenuity of private capital. Private capital offers creative lending structures, is pushing into modular and prefabricated housing, and innovating with energy-efficient designs that lower long-term costs for residents. Prop-tech companies offer analytics to surgically identify localized gaps or needs. Large employers can offer housing assistance and sway local municipalities to develop certain dense product types proximate to jobs.

6. Looking ahead, what trends or policies do you think will have the biggest impact on the future of attainable housing?

Density bonuses and zoning changes to allow more "dense" unit types, prefabrication, modular, and 3-D printing construction, and other tech enabled innovations.