Workforce housing is a safe and secure investment that allows investors to capture superior and stable investment returns while supplying much needed moderate income housing to a deeply supply constrained parts of the housing market. Workforce housing will be a stable income generator that will perform both now and in a recession based on a stable and "sticky" family renter demographic. Purpose built rental housing for larger working families can effectively serve this demographic, making it a highly stable and attractive housing type for renters and investors. Think of this housing type as a different form of "co-living", it's the same economic sharing model as co-living for younger folks, just applied to a larger family format.
These working families have several fundamental economic and lifestyle structures that they live with, where purpose designed and built workforce housing can help them achieve long term benefits. These economic and lifestyle structures are as follows:
1. They share income and expenses across the larger family groupm, spreading major costs across more wage earners, given the typical workforce housing family size of 6-10 persons, including on average 2-4 wage earners. Typically, Mom, Dad, adult children, and older relatives, individually generate between 30-50k per person, working service industry jobs. But combined in the same household, these families generate incomes between 80-120k per year in income, putting them squarely within true moderate income categories in most coast urban markets. Workforce housing delivers a unit type, say 5 bedrooms and 4 bath, that is directly conducive to this economic sharing model.
2. These family groups already live in lower and middle income neighborhoods, but have no new housing choices locally for rental housing. In any given major urban metro in 2019, most new housing market rate housing consists of studio, one, and two bedroom units, none of which are either affordable or coherent with lifestyle or incomes to afford these high rents. Rather, these families typically share 2 or more smaller much older rental units, either directly adjacent or in the same neighborhood, where these older units lack sufficient parking, newer building systems, or modern amenities. By purpose designing and building workforce housing with multiple bedrooms and bathrooms in a single unit, these workforce unit types enable the family to live together in one unit.
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3. These working families are "sticky" meaning they have strong social networks that have them want to live and work locally. Jobs are close by, their kids are in school locally, the rest of their family lives close, and their church is down the road. Workforce housing communities can help these families by supplying much needed infill rental housing that is coherent with these strong social networks AND are built in neighborhoods where they already live and work.
4. Workforce housing that fits the economic and physical lifestyle of these families also produces less tangible ancillary benefits.
As an example, because of the larger family group being in one home, younger school age kids will more likely return from school to family at home - grandma or an older in-law are more likely to be home to take care of younger kids until working parents return.
Another example we have observed in our own projects, is that these family groups share vehicles, and don’t typically own multiple vehicles per household as may be typically seen in a suburban environment. Workforce housing projects that are located in existing infill urban neighborhoods that are co-located to existing public transit are hugely beneficial to working families, as shared rides to and from work and school, with return trips via public transportation being typical.
Bottom line: Serving working families can be an incredibly safe and stable long term multi-family investment, while impacting social needs for middle income working families.
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