Work in Progress

In traditional real estate parlance, housing for middle-market customers is workforce or Class B housing. Many in the industry today prefer the term “attainable housing.” Whatever the name, in many markets, there isn’t enough of it, and prices can be a strain for those who need it. “Everyone is aware that there is an affordability crisis in housing, and it doesn’t just affect people who don’t make any money — it affects people who make a decent living,” says Jeffrey Engelstad, CCIM, a clinical professor at the Burns School of Real Estate and Construction Management at the University of Denver. “In some markets, you might need to make 130-140 percent of the [average median income] to afford a home.” The University of Denver, he adds, sees attainable housing as such a pressing issue that it’s hoping to offer a special semester-long course on the topic this fall. Supply is part of the issue. Rental housing construction has remained steady; 360,000 rental units were completed in 2018, according to the 2019 State of the Nation’s Housing report from the Harvard Joint Center for Housing Studies. But those were aimed at high-end renters, and, according to the study, the number of units renting for less than $800 a month has decreased every year since 2011 — a net decline of four million units. Economics play a part as well. Land and construction costs make building expensive, so housing is geared toward higher-end buyers or renters. Also, in many areas, wage growth hasn’t kept up with housing prices, leaving many renters and buyers scrambling for suitable housing. The Harvard report says that, in 2017, 31 percent of U.S. households spent more than 30 percent of their incomes for housing, including 15 percent who spent more than 50 percent of their income. Click to read more at www.ccim.com.