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Low-income renters are desperate to find affordable rental units. It's an uphill battle, but experts believe the landscape is rich with opportunity for practical innovation.

The affordable housing crisis has reached historic heights. Amid record lack of housing availability, an ever-changing political landscape, and decades-old processes and technology, however, the mortgage banking industry is working diligently to turn the tide of the crisis. Leaders from across the real estate ecosystem are working to better understand root challenges, and pinpoint opportunities for improvement, from financing innovation to social equity initiatives.

It’s an uphill battle for low-income renters searching for housing. The severe shortage of available and affordable rentals reached 6.8 million last year alone1. Multiple factors intensified the continuing crisis in 2021, from pandemic-related cost burdens and unemployment issues on the renter side, to supply chain issues and labor shortages on the developer side—and all points in between.

To discuss the state of affordable housing in the U.S. today, a diverse group of industry experts recently participated in a panel at the Mortgage Bankers Association’s Commercial/Multifamily Finance Convention/CREF 2022 in San Diego. I am delighted to summarize and share the key insights, including the current landscape, market and policy challenges, and opportunities for more innovation and public-private partnership to address housing affordability.

Key Takeaways

1. A tale of two markets: Affordable housing supply is historically constrained, while multifamily at large is seeing major momentum.

Affordable housing supply is at the lowest levels seen in decades, according to Woodwell’s introductory comments. We simply aren’t building affordable housing fast enough to meet the need. Yet property values across the broader multifamily sector are up dramatically, jumping up 24% in a single year and motivating developers to construction levels also not seen in decades, with more than 700,000 multifamily units currently in the construction pipeline.

Yet the challenges unique to affordable housing development are impeding progress on that front.

2. Political disagreements on affordable housing remain unresolved—on both sides of the political aisle as well as within them.

Most people agree there is a crisis in affordable housing—but deep division exists in Washington over its root causes and potential solutions. While the $1.2 trillion infrastructure and jobs bill passed, many of its original housing provisions were largely stripped out or delayed. The bill will support affordable communities in other ways, such as bringing in more transit and better data—but some argue that those enhancements will ultimately drive up the cost of affordable housing development even further, while others lament that infrastructure improvements don’t go far enough to match the scope and scale of the crisis.

3. It’s past time to update legacy bureaucratic procedures, but change won’t come easy.

Outdated zoning and bureaucracy-heavy procedures makes affordable housing more expensive and difficult to bring to market.

While other countries have been reforming affordable housing for decades, the U.S. still audits with the same conventions drawn up by the Federal Housing Authority in 1971. But developers have technology to build faster than ever that could only be dreamed of 40 years ago. Take, for instance, the 56-unit apartment building in China that was recently constructed in 36 hours alone2. This level of agility is just not possible Stateside, because the regulatory process does not allow for it—yet.

Meanwhile it still takes time to define what is even meant by “affordable housing,” from when and how to distinguish between different subsets like Section 8 and workforce housing, to the many variances in what is considered “affordable.” Panelists were hopeful that this impediment will be solved later in 2022, when the federal reserve banks and agencies plan to sit down and establish shared terminology —but time will tell how this plays out.

4. Innovation across the real estate ecosystem will be central to solving the affordable housing crisis.

Housing leaders have many bold ideas, from modular construction to streamlined tax credit and improved zoning. But more public-private leadership is needed to bring together and bring these ideas to life in ways that actually produce more properties in less time, and at lower construction costs.

For instance, some point to overly complicated and ever-changing building codes as an impediment to progress. In some cases, it can take several years for local jurisdictions to actually train their staff and fully implement them—to the point that many are just now fulfilling 2018 codes now in 2022.

Panelists also suggested that more financing innovation is needed—beginning with simply choosing to devote more capital to affordable housing lending. Most funds that have tax credit-financed housing have experienced only two or three delinquencies over 35 years, making it one of the safest residential lending categories. There was also a call to streamline the financing process by finding ways to reduce the amount of approval processes and related friction costs.

On the project development side, leaders can also draw inspiration from innovative property conversion success stories, such as schools, churches or old factories being re-envisioned as attractive, affordable housing.

5. Diversity and inclusion are increasingly important.

Black, American Indian or Alaska Native, and Latino households are more likely to be extremely low-income renters as compared with white households. According to the National Low Income Housing Coalition3, only 6% of white households are extremely low-income renters, while 20% of Black households, 18% of American Indian or Alaska Native households, and 14% of Latino households are counted in this category.

Increasingly, real estate leaders see the importance of tailoring affordable housing solutions to the diverse mix of people who live there—by ensuring a mix of voices within the groups of decision-makers and service providers alike. So, ask: does my company reflect the mix of people we are ultimately serving? Do the property management and development partners have inclusion policies that bring together minority contractors and employees? By ensuring diversity and equity across the affordable housing ecosystem, industry leaders can help ensure a more equitable affordable housing future for tenants as well as employees.

Drive affordable housing access and opportunity

From political debate to legacy systems, the affordable housing landscape is rife with barriers—but also rich with opportunity for practical innovation. This panel included Katelynn Harris Walker, Associate Director–Affordable Housing, Mortgage Bankers Association who moderated a conversation featuring Jamie Woodwell, Vice President, Commercial and Multifamily Group, Research & Economics, Mortgage Bankers Association; Ethan Saxon, Associate Vice President, LPA, Mortgage Bankers Association; Shekar Narasimhan, CMB, Managing Partner, Beekman Advisors, Inc.; Michael Staton, Vice President, Senior Mortgage Originator, CPC Mortgage Company; and Aimee Faucett, President, Agenda and Setting and Collaborate for California.

Make sure you identify and work with a proven capital expert in this critical sector so we can continue to drive housing supply. To start the conversation about your next affordable project, let’s connect, or 801-297-5811. And to learn more about KeyBank’s recent transactions, expert content and other team leaders, visit

About KeyBank Community Development Lending and Investment:

KeyBank Community Development Lending and Investment (CDLI) finances projects that stabilize and revitalize communities across all 50 states. As one of the top affordable housing capital providers in the country, KeyBank’s platform brings together construction, acquisition, bridge-to-re-syndication, and preservation loans, as well as lines of credit, Agency and HUD permanent mortgage executions, and equity investments for low-income housing projects, especially Low-Income Housing Tax Credit (LIHTC) financing. KeyBank has earned 10 consecutive “Outstanding” ratings on the Community Reinvestment Act exam, from the Office of the Comptroller of the Currency, making it the first U.S. national bank among the 25 largest to do so since the Act’s passage in 1977.




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