An Overview for the Investor of Affordable Housing

This overview will explain the Home Ownership aspect of Affordable Housing. While there remains an acute shortage of Affordable Housing as well, we are addressing the home ownership aspect as it best represents both a mitigated risk factor with a substantially shorter-term ROI to an Investor.

Housing is the cornerstone of a community. It is the umbilical cord to the family unit. It provides the environmental foundation of social growth potential. It is especially a birthplace of hope for the lower socio-economic groups. Presently It is a dilemma of worldwide proportions. Simply google any nation of this world, be it a developing nation or one of the jewels of the western world. You will see the recognition of and the priority given to the shortage of Affordable Housing in their respective nations.

While manifestation of this acute shortage may be brought about by GEO political causes and social or class distinction, it exists in rapidly fermenting conditions. It is unfortunate that in some societies, government shows little concern and actually impede third-party assistance. In other societies the problem exists in such proportion's that it is questionable as to what relief and remedies can be instituted, even with third party' assistance to add relief to the situation. In many industrialized societies the Affordable Housing shortage exists as a result of social inequities and business models that do not permit lower margin development practices. There is further quagmire by governments inability to properly fund such initiatives.

History will show that while a number of national and local programs have sparked a ray of hope, they have failed to bring about an appreciable dent in the shortage of affordable housing. While it should be recognized that the intent is there, the facilitation of same continues to fall short of the need and established goals.

Enter the Social Entrepreneur Developers. Those individual organizations that recognize the advantage of accepting lower profit margins per housing unit in return for a highly mitigated risk environment. Unlike conventional housing, Affordable Housing development, does not require the dependency of obtaining market share based upon regional absorption factors. Specifically:

What share of the local market can you obtain utilizing media, marketing and promotional budgets which increase the construction costs of the housing units to be sold in the marketplace.

Whereas with Affordable Housing there is a mandate for all banks to furnish financing to the lower socioeconomic groups through the federal community redevelopment act.  The risk factors are further enhanced by the fact that there are regional and national private non-profit and government entities that have pre-qualified candidates obviating the risk factor and costs associated with generating perspective purchases.

There presently exist such vast shortages of Affordable Housing, that it can be safely stated that in any one location in the United States, there is on average of 8/15 candidates for each Affordable Housing unit built. This prevailing condition is unfortunately predicable for the forthcoming decades.

In essence the investment in Affordable Housing is more of a proposition to facilitate the development for processing pre-qualified purchasers, UNLIKE THE RISK FACTORS ASSOCIATED WITH CONVENTIONAL HOUSING.