People often hear about class A property types in the real estate market that offer luxurious amenities, such as infinity pools, gyms, and others. Though these housing opportunities attract attention from different corners, another niche warranting urgent focus is workforce housing explains Maxwell Drever. These may not be the fashionable counterpart of luxury accommodations, but people need them more than ever. The shortage of these housing options pinched everyone hard, especially during COVID-times when social distancing and lockdowns gripped cities, affecting essential services. But what do you exactly understand by workforce housing?
Throwing light on the affordable units and their significance
Defining workforce housing
The multifamily segment serves different interests, of which workforce housing is an emerging trend. These affordable apartments are for anyone with 60 to 120% of the area median income (AMI). Workforce housing is distinct from low-income units because its target audience falls into a higher pay category than those covered by government subsidies and grants. The workforce population consists of teachers, nurses, firefighters, police officials, and others.
They form an integral part of any community or area as they look after its wellbeing, safety, and more. Alas! Despite playing a critical role in society, they struggle to meet their basic living needs, such as finding a decent home within their range or budget. The situation has only become worse in recent times, compelling them to settle outside the main cities for their sustenance to afford rents.
On the one hand, apartment rents keep increasing, and on the other hand, these people don’t get much salary appreciation. As a result, a large part of the American workforce feels rent-burdened, spending nearly 30 to 48% of their household income on this. If things don’t improve, these renters may have to use about 50% of their gross income on housing by 2025, as shown by Harvard’s Joint Center studies, informs Maxwell Drever. Alternatively, they will have to distance themselves from the urban settings to a more remote location to cut their expenses. Although the second part has already started playing out, none of these scenarios are favorable for anyone.
The need for workforce housing
Any country depends on its essential workers for daily operations, including mails, shipping, supply chain, healthcare, and other infrastructure-related jobs. The difficult times like the pandemic have been an eye-opener for everyone when they realized their dependency on the workforce. Until now, most communities resisted workforce housing for its non-glamorous status. But it has become clear that essential work cannot happen. If these people don’t get a safe and affordable place to shelter within the area they serve. At the same time, the communities and societies must take care of the necessities of their workforce groups. To ensure they can continue to live and perform their jobs hassle-free. And for this, emphasizing the inclusion of workforce housing is crucial says Maxwell Drever.
Since the last few years, there has been a shift from building high-end properties to value-add properties. But it is only the recent development that even big providers are thinking about the affordable workforce housing sector.