Daily Real Estate News  |  December 2, 2008  |   What Developers Can do to Revive the Market
While economic slumps tend to make housing more affordable, the country will still see far too many American teachers, law enforcement officers, nurses, and emergency responders paying 50 percent or more of their income just to keep a roof over their heads.

With most financial institutions pulling out as sources of equity financing for Low Income Housing Tax Credit projects and construction loans increasingly elusive, a major hurdle for workforce housing today is landing the money to develop new units.

"There needs to be a resumption of the credit markets" in order for workforce housing development to proceed on the level that is needed, according to Bart Harvey, a board member of the ULI Terwilliger Center for Workforce Housing.

Another issue, adds National Housing Conference President and CEO Conrad Egan, is land availability and cost.

Despite these challenges, experts say money can still be accessed through tax-exempt bond financing and through affordable housing programs at all levels of government.

"I would encourage developers in these tighter times to look more carefully and actively at state and local sources of support," says Egan.

As for land costs, insiders offer a few strategies. For one, developers can lower land costs by teaming up with entities--such as state or local governments--that can donate the land for projects.

Similarly, partnering with an employer to build worker housing on a site owned by the company or institutions is another avenue.

Harvey also recommends that developers explore land deals in formerly overheated residential areas, where land prices are dropping as more builders abandon projects and put sites back on the market.

Additionally, he says developers should look to close-in markets, where local governments tend to back, and even reward, high-density smart growth.

Source: Multi-Housing News, Keat Foong (11/08)

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