Cities like Charleston are well-acquainted with the lack of affordable housing, as the demand for luxury homes has remained, leaving those with limited income fewer options. Stock image
Kathleen Farrell, who heads commercial real estate at SunTrust Banks, is concerned about the workforce housing crisis facing many families in growing U.S. markets, like Charleston, South Carolina.
“The lack of affordable housing for middle- and lower-income families is reaching crisis proportions,” Farrell told Palmetto Business Daily. “The current abundance of luxury units in many U.S. markets has brought more attention to those who aren’t being served by existing inventory.”
Cities like Charleston are well-acquainted with the lack of affordable housing, as the demand for luxury homes has remained, leaving those with limited income fewer options.
“Many of the previous tactics used to finance the development and retention of affordable housing, such as tax credits, will not be enough to confront today’s challenges,” Farrell said.
Kathy Farrell, CRE at SunTrust Courtesy of Suntrust.com
Despite the increasing demand for affordable housing, landlords with low-income units are not able to collect as much rent from their tenants as they need to stay profitable.
“Higher interest rates and land prices, as well as a lack of investment in accessible mass transportation among many major cities has compounded the issue,” Farrell said.
This lack of transportation is certainly true of Charleston, a city that is concentrated with luxury housing and businesses but lacking enough affordable housing to meet demands.
Farrell explained that there is going to be a need for strong public-private partnerships in the community between businesses and non-profits alike.
"A mix of increased density by changing zoning laws, an expansion of tax credits to incentivize development, deep incentives to manage development costs, and inclusionary zoning would be a robust first step. Second would be a more creative use of the housing stock currently available," Farrell said.
Renovating older, multi-family buildings to accommodate more people in smaller units would ease a lot of the current housing crisis.