The Affordable Housing Asset Class

RCLCO’s latest report – an update to work completed with the Terwilliger Center for Housing at ULI in 2019, presents an overview of affordable housing as a distinct asset class. Our hope with this publication is to support the efforts of affordable housing developers, preservers, operators, and investors, and in turn provide for the, sadly, growing populations of people who require affordable housing. Market intelligence, we hope, can serve as an accelerant to the quality and quantity of mission-driven housing investments.

This work was supported by The RCLCO Foundation, whose mission is to make a meaningful difference in the practice and policy of affordable housing, by encouraging and facilitating the development of balanced communities.

• The first section provides a basic characterization of the current stock of affordable housing, by sizing and scoping what has been built, who have been involved, where supply has gone, and how much has been transacted.
• The second section begins to quantify the performance of the asset class, both operationally and in the capital markets. This section highlights the nature of the asset class’ advantages, with an emphasis on stability of income and diversification benefits.
• Finally, the third section takes a forward look at the robustness of future demand, reflecting both the fundamental need for increased supply and the long-term attractiveness of investment towards this asset.

This report combines takeaways from the existing literature with novel analysis of multiple public and proprietary data sets. The nature and limitation of these sources are outlined in the report document on page 8. Collectively, the data sources used present a key challenge, as they rely upon incongruent definitions, sample sizes, and methodologies. However, their distinctive uses also complement each other in telling a fuller story about the characteristics, performance, and prospects of a growing and institutionalizing asset class. The precise source and use of each figure is qualified in footnotes where relevant.

Download the deck by logging into your RCLCO web portal account, or by filling out the form to the right and clicking on the download link that appears.

Interested in learning more about RCLCO’s consulting services regarding affordable housing? Contact Kelly Mangold today at kmangold@rclco.com.