The affordable housing crisis – the idea that the cost of both rental and private housing is increasingly beyond the means of a large segment of the population – is perhaps one of the biggest economic issues of our age. More than 11 million Americans now pay at least half of their salaries for rent, according to a 2016 Harvard University study – a rate that has increased more than 30 percent over the last five years.
A wide variety of solutions have been proposed in communities across the country, ranging from new legislation or policy changes to pure philanthropy. In Silicon Valley – regarded by some as ground zero for the crisis – Google recently pledged to invest $1 billion to help ease the area’s burden. Facebook and Microsoft have made large donations of their own to help pitch in (or to the more cynically minded among us, to garner a bit of positive PR).
Another solution appears to be emerging, however, from the private world of real estate investment, which is showing a growing interest in so-called “workforce housing.” While not designated as “affordable” by government standards, this loosely-defined asset class can generally be classified as “Class-B” and “Class-C” apartments – the kind of typical, non-amenitized apartment buildings you can find in countless suburbs and secondary cities across the country. This widening interest has recently manifested in dedicated workforce housing funds launched by major real estate players such as L&M Development.
Workforce housing’s appeal to real estate investors has little or nothing to do with charity. Rather, it is all about making the most of cyclical market forces. As millennials and others have flocked back to large metropolitan areas over the last decade-plus, investment dollars and development have followed. Much of those funds have gone into luxury-branded housing in major urban centers, where expensive units have been snapped up by educated, high-earning professionals.
In recent years, however, that market has begun to show signs of weakening due to oversupply and other factors. In the meantime, massive demand has accrued for housing that is approachable for the large segment of the population that can afford neither a down payment for a home, nor the sky-high rents of a “luxury” apartment building. By investing in housing that is approachable for middle-class and working-class families, these companies can help tap into that underserved portion of the market.
To date, the majority of mainstream media has explored the affordable housing crisis primarily through the lens of public policy. Meanwhile, business and financial reporters have begun exploring workforce housing as an investment strategy, laying out its case as an asset that retains significant financial upside, while also serving as a reliable bulwark against an economic downturn brought on by trade tensions or the length of the cycle.
This rare convergence of conscience and capitalism, however, presents a fortunate opening for PR professionals. While we are charged with disseminating the messages most important to our clients, those details can often fail to account for how their business makes an impact outside the confines of their particular industry.
At its heart, our job is to weave those core messages and value propositions into the wider narratives journalists are attracted to. Most often, those are the ones that reverberate well beyond the confines of a board room or investment portfolio – they have an impact on broad social causes or socioeconomic trends that affect vast swaths of the country.
While real estate investment leaders often may be reluctant to present themselves as champions of social justice, it is wholly possible that their pursuit of success can also serve the greater good. In the case of workforce housing and its place within the larger crisis surrounding housing across the country, the embrace of those narratives creates a scenario in which everyone can benefit.