Early 2019 Affordable Housing Landscape Assessment
Affordable housing policy and supply are in for major changes in 2019. On a national scale, we can predict slightly more spending at the federal level this year, as House Democrats push for more money for affordable housing. The 2020 election on the horizon will also push policy ideas surrounding affordable housing.
A few bills have recently been introduced that could help make a dent in the affordable housing crisis nationally. These include the American Housing and Economic Mobility Act, the Rent Relief Act and the Housing, Opportunity, Mobility, and Equity (HOME) Act. Strategies in these bills include generating funding to produce, preserve and operate affordable homes and providing tax credits to households who spend more than 30 percent of their income on rent.
Not only are politicians addressing the issue at the federal level, but state and local governments are working to create and protect affordable housing in their communities. A few states that are key to Dominium’s development plan for 2019 are Tennessee, Colorado, Georgia, Texas and Minnesota, and each of these markets has its own set of challenges and opportunities.
According to Dominium Vice President and Project Partner Ryan Lunderby, “Tennessee is on the leading edge of leveraging federal resources to build and preserve affordable housing.” Developers are incentivized to create affordable housing in the state because of their access to these federal resources as well as community incentive tax credits at the state level. Dominium is planning on both new construction and preservation opportunities in Tennessee in 2019.
Dominium is currently developing several properties in the Denver, Colorado area. The need for affordable housing is high there and these properties are all reaching 100 percent occupancy before they officially open. Dominium Vice President and Project Partner Ron Mehl says that Dominium can’t completely solve the affordable housing crisis in growing cities like Denver, but “these projects go a long way to support the issue. Building multiple 200+ unit properties each year can help alleviate the need for affordable housing.”
Georgia has one of the strongest tax credit programs for affordable housing in the country, and investors receive dollar-for-dollar returns on their investments. According to Dominium Vice President and Project Partner Nick Andersen, “Atlanta is an economically strong place and it is growing rapidly, creating a significant need for affordable housing. Dominium is uniquely suited to the opportunities in Atlanta and has re-syndication and new construction plans in this market.”
In Texas, Dominium is working on several new construction projects as well as acquiring properties. It is an important market for Dominium because there are several very large cities and the way these cities have been developed provides available land for new construction. Dominium Vice President and Project Partner Jeff Spicer works in Dallas full-time to ensure that Dominium can be first-to-market in this key state. Dominium Vice President of Compliance Jen Brewerton also works in Texas. She said the state agency incentivizes affordable housing developers to build there by making tax credits highly available.
Dominium’s largest presence is in Minnesota, and according to Dominium Vice President and Project Partner Owen Metz, this is not just because it is convenient to develop in the company’s “backyard.” Like many growing metro areas that are seeing population and income growth, the Minneapolis/St. Paul area has a devastating lack of supply of affordable housing. Dominium has helped to meet the demand with over $1 billion in developments since 2015, but there is still a shortage of affordable housing across the state.
The demand for affordable housing only continues to grow, and Dominium is actively working in key markets around the country to acquire or develop properties to meet this need. While federal policies play an important role in encouraging greater affordable housing development, state legislation that incentivizes development and investments in affordable housing will continue to be a leading factor in determining in which markets Dominium and other developers choose to create housing.
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