Since its initial release in 2023, the framework has been downloaded for use by more than 600 organizations in 41 states across the United States. It is the only industry standard for assessing, managing, and reporting social and environmental performance in the United States multifamily sector. It is evidence-based, measurable, and designed for the real world where property owners must manage rising costs, investors must meet their fiduciary obligations, governments must make efficient use of limited taxpayer dollars, and renters must be treated as if they are not just another line on the balance sheet.

The Origin Story

Our journey began in late 2020 during conversations with impact focused property owners and large institutional investors. During the pandemic, these property owners had developed an even greater appreciation for the value that impact-driven initiatives and practices were having on both the lives of their renters and the financial stability of their properties. At the same time, there was a growing interest in the affordable multifamily housing sector from institutional investors who were looking to expand their impact investment allocations and meet their fiduciary obligations.

During these conversations, we came to the common conclusion that a common industry framework was needed to establish benchmarks and reporting guidelines that would allow for increased capital flows from new investors and help more owners/operators develop impact investment strategies that improved the lives of their renters, strengthened communities, reduced risk, and improved a property’s long-term financial performance.

Armed with this guidance, we formed the Multifamily Impact Council and set out to build a common impact investing framework that could serve as an operating system for impact investing in the multifamily housing industry. We based our approach on three fundamental values.

• Ease of Use: The framework and reporting metrics would be grounded in common-sense practices and utilize existing or easy to obtain reporting metrics so that it could be easily understood and used by organizations across the capital stack.

• Free and Transparent: Our framework would always be made available at no cost for everyone to download, use and provide feedback.

• Market Based & Research Driven: The framework would be informed by academic research, industry best practices, and property level performance data. And it would be updated annually based on additional research and user feedback.

Download the Framework Here!

The Seven Principles of the Multifamily Impact Framework

The Multifamily Impact Framework consists of seven key impact principles. Each one defines a specific impact practice with clear thresholds, practical metrics, and operational guidance. Together, these principles form the backbone of a consistent, national approach to responsible and financially sound impact-driven multifamily operations.

1. Affordability is the core principle of our Framework. It sets expectations for reporting the number of income- and rent-restricted units and establishes a common definition and minimum threshold requirement that provides a clear and consistent approach for owners and investors to assess affordability as a lever that improves economic occupancy, reduces turnover, and strengthens the financial stability of more renter households.

2. Resident Engagement is more than just hosting pizza nights and planting community gardens. It establishes a baseline for building trust, asking residents what they need, and then delivering. Our impact thresholds and reporting guidelines go beyond participation rates and anecdotes. They quantify how resident engagement programs support resident retention, increase lengths of stay and reduce bad debt and eviction-related costs. And they help quantify the extent to which property owners build ties with local organizations, create healthy living spaces, and foster a sense of community and trust.

3. Housing Stability is the beating heart of resident well-being and one of the most powerful drivers of investor value. The Framework identifies impact practices that support renters before and after they hit a rough patch and quantifies the success of those practices. A property with a structured process that supports housing stability supports stable revenue for property owners, generates more consistent cash flow for investors, and helps more residents and their families sleep at night.

4. Health and Wellness recognizes that housing quality directly influences resident health. Poor ventilation, bad lighting, and mold are more than just the sign of a poorly managed property, they are the sign of an unhealthy living environment. The Framework defines and establishes thresholds for healthy building management and encourages cost effective preventive maintenance that extend the life of a property’s mechanical systems and improve resident satisfaction.

5. Climate and Resilience is based on two common-sense ideas. The first is that when buildings waste energy and water, they waste money. The second is that property owners who ignore climate and natural disaster risk are more likely to get punished by mother nature and pay a higher price for insurance and capital. The Framework establishes clear climate and resilience thresholds that enable property owners to track energy and water use, improve their waste reduction efforts, and protect their properties and residents from severe weather and natural disasters. It does not ask that you believe in climate change, but it does require that you believe in math. Investments that create more sustainable properties can reduce operating expenses, mitigate risk, and stabilize net operating income. And they are pretty good for the planet as well.

6. Economic Mobility is a fancy word for a simple concept: Where a person lives and how much they pay to live there is a key factor that will determine their success in life. This matters to investors because the property owners they invest in are successful when the people who live in their properties are successful. The Framework recognizes this connection and defines how property owners can communicate to investors where a property is located and how the services provided at that property are helping residents stabilize their finances and move up the economic ladder.

7. Good Business may sound vague for an impact principle, but its underlying premise is direct and clear. Organizations that embrace good business practices, that support a diverse and inclusive workforce, that embrace opportunity and pay equity, that treat the people who live in the buildings they own and operate with dignity and respect are more likely to do better than those who do not. These are not performative concepts or moral judgements. They are simply good business practices. They help organizations attract larger talent pools of potential job applicants. They increase productivity, drive competition, and foster new and innovative ideas. And they help business owners, especially those in the multifamily sector, build closer connections with their customers and the communities in which they operate.

Putting the Framework to Work

We did not create the Multifamily Impact Framework to gather dust on a shelf. It was designed to get used and help create a common language for impact that makes it easier for more capital to support more impact-driven multifamily properties. So far, the use cases for the framework have focused on the following areas:

• Impact Reporting: For years, owners and managers have argued about which metrics matter and how to define them. Our framework establishes standard reporting guidelines, differentiating between property-level and portfolio-level expectations, and it combines quantitative performance (the numbers) with the narrative explanations (the context investors need).

• Due Diligence & Underwriting: Impact doesn’t start after the property is built or bought. It starts when potential buyers and developers kick the tires. The Framework provides a structured way to evaluate properties during due diligence. It clarifies red flags, identifies realistic opportunities for improvement, and reinforces the need for a discipline approach that balances operator capacity and resident needs. Impact isn’t about adding one more picture of a playground to an annual report. It’s about underwriting and operationalizing practices that add value across the board.

• Property and Asset Management: Once a property is in the portfolio, the Framework becomes a practical management tool to identify what’s working and what isn’t. Resident services teams and property managers collaborate more effectively when they’re aligned around the same scorecard. And owners can use the framework to inform their decisions and make the most efficient use of capital to allocate resources, stabilize residents and support property performance.

• Investor Impact Assessments: Institutional investors are increasingly using the Framework to evaluate whether impact fund managers have a solid plan for doing what they say they will do. Our framework augments existing assessment approach, streamlines due diligence questionnaires, and creates consistent reporting format that makes it easier to evaluate opportunities and allocate capital at greater scale.

• Product Development and Policy Initiatives: The Framework also helps state and local governments design affordable housing programs that attract long term investment capital and are aligned with the long-term affordability needs of the community. From structuring property tax abatement programs to developing innovative financing products, the framework was designed to help create affordable housing programs that leverage responsible private capital, improve the lives of the people who live in our communities, and make the most efficient use of taxpayer dollars.

Do Well. Do Good. Do More.

The Multifamily Impact Framework was built on a simple belief: impact investing in rental housing works best when it improves the lives of residents and strengthens the long-term performance of the properties they call home. It gives owners, investors, lenders, service providers, and public officials a common language to turn that belief into everyday practice.

It is not perfect. It may not always reinforce your current world view, and it was not designed to make an annual report look better. It is a practical tool for making smarter decisions, attracting responsible capital, reducing risk, and creating more stable, affordable, and sustainable rental housing.

Please feel free to download the Framework, put it to work, and tell us what you think.

Download the Framework Here!

The Affordable Housing Handbook has moved on from Substack and into to a new home! As we finish unpacking our boxes and explore our new neighborhood, I wanted to take a moment to explain why we did such a thing and how it will impact you.

So, How Will It Impact You?

These two things will remain the same.

1. All of our existing subscribers will continue to receive our newsletters delivered to their email inbox, and if you decide you don’t want that anymore you will still be able to opt out and read our stuff online.

2. We will still try to write interesting things that matter to you, and share insights from industry leaders and affordable housing leaders from across the United States.

These three things will change

• We are no longer restricting access to our archives to paid subscribers. Anyone who subscribes to the Affordable Housing Handbook will now have the ability to check out all of our old stuff.

• Our subscribers also now have access to the additional content in our Affordable Housing Resource Center. This includes a highly curated research library, best practices and case studies from impact-driven practitioners from across the country, and opportunities to join open conversations with industry leaders and peers from across the country.1

• If you are a paid subscriber (or work for an organization that is a member of the Multifamily Impact Council (MIC) Community) you also now have full access to our growing collection of Impact Framework User Guides.

Why Are We Doing This?

At the risk of getting existential on you, I have to admit that there were several moments during the transition process when I asked myself the same question.

The reason, however, was pretty simple.

Over the course of the past year, the growth in our subscriber base greatly exceeded our expectations. As a result, we wanted to build a platform that allowed us to grow at scale and offer more content and services to more readers.

Making this move allows us to expand the amount of content that we can share with our subscribers and build a deeper, more usable resource center for practitioners, advocates, and investors who care about making rental housing more affordable and sustainable and are looking for a community of folks who share that same belief.

Our Commitment To You

Over the past 24 months, The Affordable Housing Handbook has grown from a simple weekly newsletter into a shared workspace for a broader community of people who are trying to make the rental housing system fairer, healthier, and more sustainable. None of this would have happened were it not for you, and I want you to know how much I appreciate that you took the time to hit the subscribe button.

It is very important to us that everything we send you has some value. As we expand our platform to provide more content, I want you to know that our commitment to quality over quantify will not change. If you have not already done so, please feel free to check out the Affordable Housing Handbook’s new home - here.

If you have any questions or just want to tell me what you think, shoot us a note at MIC@multifamilyimpactouncil.org and I will follow up with you.

Thanks again!

Bob

Don’t get me wrong. A stomach bug that causes severe gastrointestinal distress is not anyone’s idea of a good time. But there have been no deaths; it is not contagious, and it can be effectively treated with antibiotics.

I find it hard to imagine that we live in a world where this is front page news. Especially when millions of people today are experiencing a more significant health crisis that is causing serious illness and reducing their life expectancy in communities across the United States.

Unfortunately, there is no scary-looking parasite or explosive diarrhea to make this story sensational enough to hit our news feeds. And so it remains a sadly casual fact that there are 10 million very low-income households in the United States who are more likely to get sick and less likely to live a long and healthy life because they are paying more than half of their income on rent.

This is What A Health Crisis Looks Like

When people are poor and spend more than half of their monthly paycheck on rent, they can’t just tighten their belts. They have to stop doing healthy things that most of us take for granted. Prescriptions don’t always get filled. Doctor’s visits get postponed. Grocery bags get lighter. Air conditioners don’t get used in the summer. The heat gets turned off in the winter.

New research from the National Institute of Health (NIH) has made this connection even more clear. A recent study found that people living in communities with the highest severe housing cost burdens experienced significantly elevated rates of premature cancer and heart related deaths. Additional NIH research discovered that when the percentage of severely cost burdened renters in a community goes up, there is a corresponding increase in hospitalization for cardiac arrest and heart failure. The same study also found that severely cost-burdened renters and their families were 22% more likely to suffer from hypertension and 15% more likely to suffer from depression. These findings were reinforced by researchers from Princeton University and the United States Center for Economic Studies who determined that households who were severely cost burdened had a 12% higher mortality rate than those who were not.1

Simply put. If you don’t make a lot of money and you pay more than 50% of your income on rent, you are more likely to get sick and less likely to live a long and healthy life. And this is super important because when we talk about the issue of affordable rental housing, it is important to understand that this is about more than rebalancing supply and demand dynamics and figuring out who should be building what and where. This is also about fixing a a slow-burning epidemic that is sucking the life out of the hospital workers, janitors, and service professionals who make this great country go.

And it just so happens, that there is something that can be done about it today.

Have You Met the Housing Choice Voucher?

The Section 8 Housing Choice Voucher program is a rental subsidy funded by the federal government and administered by local public housing agencies. Last year, it eliminated housing cost burdens for more than 2.3 million very low-income households. It is the largest and most effective rental assistance program in the country. How it works is really quite simple.

• The Housing Choice Vouchers are only available for people who make a very low income2.

• If you are lucky enough to get a voucher, you can fill out a lease application to live wherever you want – so long as the property meets basic quality standards and the property owner accepts housing choice vouchers.

• If your lease application is approved, the amount you pay in rent will be capped at 30% of your income and the voucher will be used to pay the difference directly to the property owner.3

What makes a housing choice voucher great for low-income households is that it eliminates their housing cost burden and frees up the cash they need to live a regular life. They can fill more prescriptions, buy more groceries, and give their hearts and minds a break from the relentless stress of being poor in America.

The benefit for taxpayers and communities is also significant because healthy people consume fewer Medicare and Medicaid resources. They alleviate the strain on local social service programs, and they have more residual income to spend in local stores and restaurants.

Housing choice vouchers are also a pretty good deal for property owners and investors because they provide a guaranteed stream of revenue that also makes it easier for more folks to pay rent on time. That means fewer bad debt costs, higher economic occupancy, and lower vacancy-related expenses. And if something happens and the renter falls behind, the voucher guarantees that the federal portion still gets paid.

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Three Excuses For Doing Nothing

The housing choice voucher program is not perfect, but it is pretty darn good. And it works because it does one thing well. It enables millions of hardworking people who don’t make a lot of money to afford a place to live in an apartment building that already exists.

If you are new to the world of affordable rental housing, you might wonder why we aren’t just funding more housing choice vouchers. Here are some common excuses as to why we don’t.

Excuse #1 “We Don’t Have the Money”

I grew up on the prairie in Western South Dakota, and this is a textbook example of what my rancher friends would call a “bullshit” argument.

In the last twelve months, the federal government spent $1.1 billion to purchase warehouses for the Department of Homeland Security. Then we spent an additional $1.4 billion retrofit those buildings. According to CoStar, we paid an above market premium of 13% for these properties and then turned around and sold seven of them at a 15% loss. All told, we spent nearly $3 billion for warehouses we did not even need.

Had we spent that same $3 billion (a 10% increase in current spending) to increase the housing choice voucher program, we could have eliminated housing cost burdens for roughly 250,000 renter households. That’s more people than the population of Las Vegas.

We may not have enough money to fund housing choice vouchers for everyone, but we have enough to fund 10% more.

Excuse #2. “The Program is Too Complicated”

It is fair to say that the housing choice voucher program is too complicated, but is that really a reason to do nothing? The Low-Income Housing Tax Credit program is one of the most complex financing structures in the history of American public policy and yet policymakers from both parties continue to boost funding for the program because, while it is far from perfect, it works more often than it doesn’t.

The same argument should also be applied to the housing choice voucher program. We cannot afford to wait for perfection when “better than yesterday” will do.

Excuse #3 “It’s not Mandatory.”

This is also true. Property owners are not always required to accept a housing choice voucher, but most property owners do so anyway. And an increasing number of states and local governments are making sure they do. Today, nearly 57% of all housing choice voucher holders live in a jurisdiction where property owners are required to accept them as a form of payment.

Yes, it would be great if every property owner accepted vouchers, but we don’t have to wait for universal participation before we expand the program. Property owners who understand the value of a guaranteed payment stream will reap the benefits of the federal subsidy and create long-term value in the communities in which they invest. The property owners who don’t see the value are free to take their chances and hope for the best.

New is Not Always Better.

Over the past several years, policymakers and housing advocates have spun up program after program aimed at the affordable-housing shortage: new set-asides, new tax incentives, and new pilot funds. Each has its own set of bells and whistles. Each also comes with its own design phase, its own rulemaking process, its own unique set of implementation rules, and its own unique learning curve.

Some of these programs might eventually work, but they will be too late for the family that is struggling to make ends meet today and more likely to have health issues tomorrow.

So maybe it’s time to stop innovating and simply put more housing choice vouchers in the hands of the people who so desperately need them. Because we have enough money to get started. We have a pretty good program that is ready for action, and we are smart enough to figure everything else out as we go.

All that remains is the will to do it.

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We covered a lot of ground. We started with the Road to Housing Act, and the importance of streamlining duplicative regulations. We also talked about the cascading costs of evictions, what makes green and affordable housing is simply good business, and why we should spend less time worrying about whether or private capital cares and more time focused on attracting the kind of private capital that can add value to our communities.

And, because I clearly had too many cups of coffee before we started talking, Stephanie let me talk about all of things that keep driving me nuts after 30+ years in the business.

None of this is rocket science. Give it a watch, follow Stephanie on Substack, and let us know what you think.

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A long-awaited 52-unit affordable senior community is finally being built in Davenport, Iowa. Getting there meant clearing a milestone that a market-rate developer would never recognize: purchasing a collection of standard building components. Over six months, the construction team filed nine federal waivers, for electrical switchgear, HVAC equipment, the elevator, and door hardware. In each case the product they needed was either not made by a domestic supplier or not available at a price an affordable community could carry. Each one became a waiver, a cost increase, or both. We wish we could tell you this was one project’s bad luck. It isn’t. It’s happening to affordable housing across the country.

A relatively new law, “Build America, Buy America” was passed in 2021, inside the bipartisan infrastructure package. It requires that the iron, steel, manufactured products, and construction materials in any federally funded infrastructure project be made in America. Housing built with federal dollars counts as infrastructure, so HUD programs like HOME, CDBG, and the Housing Trust Fund are covered.

Since HUD knew the supply chain was not ready when the law as passed, it waived the rules for its own programs and phased them in. Those waivers have now expired and the affordable deals reaching construction this year are the first to feel the effects of this requirement at full force. And, as luck would have it, they are doing so just as HUD’s waiver process has slowed to a crawl.

The goal of the law is sound: public dollars should strengthen domestic manufacturing and put Americans to work. But applied to affordable housing, the rule is inflationary: it makes homes more expensive to build at the moment the country needs them most. And on an affordable deal, those added costs have nowhere to hide.

Nowhere to go but up

A market-rate developer hit with a higher bill has somewhere to put it. They can raise rents, or if the market won’t bear it, walk away from a deal that no longer makes sense. An affordable developer has no such room. The rents are capped by law, the subsidy is a fixed award, and the financing was locked in months earlier on the assumption that costs would hold. You can’t build more units to increase revenue because the regulations associated with building the units are what is driving the cost. That leaves only two options: build fewer units or a watch the deal fall apart.

Multiply this across every affordable deal now confronting this rule, and it stops being one project’s problem. It becomes a problem that is constraining new supply from reaching the market and it is increasing the cost of building the ones that doe. This, in a country that is already short 4 million homes. And the people who end up bearing the cost are those that can least afford it pay for it, in higher rents and longer waits for housing supply that now no longer exists.

One developer we know ran that math and decided to hand back their federal grant because complying with Buy America would have cost more than the grant was worth. Somehow the law we created to build more homes has now become one more reason not to build more homes.

To the people who finance and build this housing, a rule about door hardware and light fixtures is not just a paperwork nuisance. It is a cost with no benefit. It makes it harder to get affordable housing built. It makes it harder for hard-working people to afford to live in the communities where they go to work.

Build America, Buy America was meant to strengthen American supply chains. Applied to housing, it not only weakens the supply of affordable housing. It weakens the financial stability of our most important natural resource: the people who actually build America.

What it actually costs

The numbers from real projects make the case better than any argument can.

• Door hardware. Outfitting a 40-unit building with standard imported door sets runs about $67,000. The only American-made equivalent is a hospital-grade product built to keep germs off surfaces in an operating room, and it is priced like one: $546,000. More than eight times the cost, to open and close the same doors.

• The elevator. On the Davenport job, the only compliant elevator the team could find cost about $75,000 more than the standard unit. The switchgear and the HVAC told the same story: the American product existed, but only at a premium.

• The hidden labor. For months, the project manager and a coordinator each spent half their time tracking down compliant parts and documenting them. Subcontractors carry the same load, pricing out and certifying every component the rule touches. On a newer Iowa job, some of the most reliable subcontractors are now refusing to bid at all, because they have seen what a Buy America project demands.

The rule even builds in a small cushion, a sliver of cost a project can cover without filing paperwork. On the Davenport job that cushion is about $150,000, and the team has already spent $125,000 of it, simply to cover parts it could not buy American. The margin the rule allowed for is nearly gone before the building is finished.

And this is not one team’s bad luck. In a 2025 survey by the National Association of Home Builders, 26% of builders using HOME or CDBG said Buy America would push them to abandon some affordable projects, and nearly one in five said they would have to raise rents to cover the cost. Either the homes do not get built, or the families who need them must pay more.

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A rule built for roads, not homes

This is what happens when a rule written for highways and bridges is stamped onto housing policy. The mandate does not account for the fact that an affordable housing development is financed differently than typical infrastructure projects. There are no doors or fire alarms in a freeway. There are no ceiling fans or elevators in a bridge. Unfortunately, the Build America, Buy America mandate does see the difference. As a result, Affordable housing project managers keep hitting the same dead ends that increase the cost of doors, cabinets, fire alarms, switchgears, light fixtures, ceiling fans, and access controls.

Both goals can win

Making things in America matters. The pandemic showed how fragile global supply chains had become, and decades of decline in our manufacturing base have hollowed out towns that once were homes to people who made those things. Public money should be spent with that in mind, but it must make sense. Because the people who make things need an affordable place to live. And, today, we don’t have enough affordable housing. Of the roughly $75 billion a year in federal funding for affordable housing programs that the Build America, Buy America law impacts, most goes to rent and operating support. Only eight to ten billion (a little more than 10%) pays for actual construction. 10% is small percentage of total outlays, but the unintended consequence of the new law is that it makes the remaining 90% of federal funds less effective. This is the hidden cost of these new sourcing and compliance regulations - they make all of our efforts less effective.

The encouraging part is that the fix does not require weakening the original law. It simply requires that we apply it with affordable housing in mind.

• Give developers a fast, predictable way to get a waiver when a compliant part does not exist, instead of an open-ended wait.

• Focus the rule on the major inputs where American sourcing delivers real benefit, not the trim and hardware where the cost dwarfs the point.

• Publish a shared list of parts that genuinely cannot be sourced here, so most waivers never need to be filed.

• Phase the rules in by category, giving American suppliers time to catch up before the mandate bites.

Congress does not have to start over. A bipartisan bill, the Build Housing Affordably Act, would pause Buy America for these housing programs while HUD studies the real effects, and would require a decision on every waiver to be made within 90 days, or else get approved automatically1. It is narrow, it is sensible, and it deserves to pass.

Get it right

A policy that makes American homes cost more, take longer, or simply fall apart is not good industrial policy. It is not good housing policy. And it is not a good way to spend public taxpayer money.

We support the goal. Rebuild American manufacturing, back American workers, build dependable supply chains. But start from the fact that keeps getting lost: our homes are already built in America, by American companies and American workers2. The only question is whether the parts that go into them can be bought without grinding the whole project to a halt.

If we get it right, the Build America law and increasing the supply of affordable housing can pull in the same direction. Get it wrong, and we will keep spending public dollars to build fewer and fewer homes. The senior community in Davenport is still on schedule. The next one should not need six months and nine waivers to do the same.

Mike Kingsella is the CEO of Up For Growth, a national, cross-sector member network committed to solving the housing shortage and affordability crisis through data-driven research and evidence-based policy.

Chris LaGrand is the Senior Vice President at Woda Cooper Companies, an employee-owned affordable housing firm that owns and operates over 19,000 affordable housing units across the United States.

For years, affordable housing owners were often asked to think about affordability, resident services, sustainability, and investment performance as separate objectives.

In practice, they rarely are.

Over multiple market cycles, we have found that affordable housing performs best when residents, properties, and communities remain stable. The strategies that improve resident outcomes often strengthen the underlying asset as well. Likewise, investments that improve operational performance frequently create tangible benefits for residents.

That relationship has become even more important in today’s environment.

Rising operating costs, insurance pressures, higher interest rates, and persistent housing shortages have forced owners and investors to think more holistically about preservation. At the same time, residents increasingly need healthier, more efficient, and more resilient housing communities.

As a result, the most successful preservation strategies are no longer focused solely on maintaining affordability restrictions. They are focused on creating long-term resilience for residents, for properties, and for investors.

What is encouraging is that the data is beginning to support what many long-term affordable housing owners have observed firsthand for years.

The Multifamily Impact Council’s recent research with NYU Stern School of Business helps quantify the relationship between impact-oriented practices and financial performance. The findings suggest that resident-focused programs and sustainability investments can contribute to stronger resident retention, operational efficiency, and long-term asset resilience.

Importantly, the research moves the conversation beyond theory. It suggests that affordability preservation and impact-oriented operations are not competing priorities. Increasingly, they can be complementary drivers of long-term value creation.

Preservation Requires a Broader Playbook

The affordable housing sector faces a widening capital needs gap. Much of the nation’s affordable housing inventory is aging, while replacement costs continue to rise. In many markets, it is becoming harder and more expensive to build new affordable housing at the scale required to meet demand.

That makes preservation essential.

But preservation today needs to mean more than keeping units affordable on paper. It also means improving the long-term performance, durability, and quality of the housing itself.

Historically, some owners viewed sustainability investments and resident services as “nice- to-have” additions to a preservation strategy. Increasingly, they are becoming core components of one.

Energy and water efficiency upgrades can reduce operating expenses, improve asset durability, and lower utility volatility. Better building systems can reduce deferred maintenance pressures and create a healthier living environment. Resident-focused programs can support housing stability, reduce turnover-related costs, and strengthen community outcomes.

For long-term owners, these benefits are closely connected.

A resident who is more stable is better positioned to remain in place. A property that operates more efficiently is better positioned to preserve affordability. A community that receives sustained investment is better positioned to thrive over time.

That is particularly relevant in today’s environment, where investors are placing greater emphasis on downside protection, operating discipline, and durable cash flows.

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A Real-Time Example: Encore in Camden

At Hudson Valley Property Group, we see this dynamic play out across our preservation portfolio.

One recent example is Encore in Camden, New Jersey, where we recently completed the preservation and rehabilitation of 321 affordable homes.

Our objective was not simply to renovate an aging property. It was to strengthen the long- term viability of the asset while improving the experience of the residents who call it home.

That meant modernizing apartments and building systems, but it also meant creating spaces that support health, connection, and opportunity.

The redevelopment included a dedicated indoor children’s play space, a fitness center, community gathering areas designed to host workshops, mentorship programs, and resident programming, as well as an on-site urban farm that expands access to fresh produce for residents.

These investments were intentional. Preservation is not simply about extending the life of a building. It is about creating an environment where residents can thrive.

At the same time, water efficiency upgrades, building system improvements, and other sustainability measures were integrated into the project from the outset - not because they checked an ESG box, but because they improved building performance, reduced operating costs, and helped create a more resilient property over the long term.

In affordable housing, utility expenses directly affect both ownership economics and resident affordability. Reducing water consumption and improving system efficiency can help lower operating costs while also reducing burdens that disproportionately affect low- and moderate-income households.

For residents, these investments help create a higher-quality living environment. For ownership, they help create a stronger and more efficient asset.

Those outcomes are not separate. They are connected.

Why This Matters for Investors

Institutional investors are increasingly recognizing that affordable housing has characteristics that can support durable long-term performance: stable demand fundamentals, structural supply constraints, and comparatively resilient occupancy.

But the next evolution of the sector will depend on how effectively owners integrate operational excellence with resident outcomes.

Properties that maintain affordability while reducing operating inefficiencies, modernizing infrastructure, improving environmental performance, and supporting resident stability may be better positioned to withstand economic volatility over time.

That does not mean every impact initiative automatically creates value. Execution matters. Discipline matters. Alignment between capital, ownership, and operations matters.

But the broader direction of the market is becoming increasingly clear.

Affordable housing preservation is no longer solely about maintaining rent restrictions. It is about creating operationally resilient communities that remain financially sustainable for decades.

The Multifamily Impact Council’s latest research helps move this conversation from theory toward measurable evidence. For owners, operators, lenders, and investors, that is an important development.

The affordable housing industry has long understood the social value of preservation. What is becoming increasingly clear is that thoughtfully executed preservation strategies can create operational and financial value as well.

The strongest affordable housing investments are often not those that prioritize resident outcomes or investment performance in isolation. They are the ones that recognize the connection between the two.

As the industry continues to evolve, that alignment may become one of the defining characteristics of successful long-term ownership.

The firms that recognize that connection - and build strategies around it - will be best positioned to preserve housing, serve residents, and generate value over time.

Jason Bordainick is the co-founder and managing partner of Hudson Valley Property Group. He frequently lectures at graduate schools of business on the future of affordable housing. He has been recognized by New York Real Estate Journal as “One to Watch” 2022 and as Affordable Housing Finance’s Young Leaders. He serves on the board of the New York State Association for Affordable Housing and is a member of the National Leased Housing Association and SPIRE (Stanford Professionals in Real Estate).

That public assumption flies in the face of what experienced affordable housing property owners and investors have known for a long time. When an apartment building maintains affordable rents and supports a healthy living environment, the people who live there are less likely to move and more likely to be able to pay rent on time. When apartment owners invest in making their property more energy and water efficient, they are more likely to save more money on their utility bills.

The logic makes sense: Healthy, financially stable renters and efficiently managed properties are essential to financial performance. But the challenge has never been understanding the logic. The challenge has been building the evidence and making the case to prove it.

Making The Business Case for Impact

Interest in impact‑driven multifamily housing investments has grown steadily among private equity investors, pension funds, endowments, insurers, family offices, and high‑net‑worth individuals. While much of the early interest shown by investors began with a strong desire to address rising rent burdens and climate risk, it has been sustained by the fact that these investments support their fiduciary obligations as well.

That is a really big deal. Because if we want to attract more private capital into affordable and sustainable housing, investors need more than a feel-good story. They need to know that it makes money. They need data and research that explains how affordable housing programs, resident services, and sustainability practices also improve a property’s cash flow, reduce risk, and create long-term value.

In recent years, some great academic research has been published to support this argument at the broader portfolio level. A study from Columbia Business School and the Erasmus School of Economics found that properties with more affordable rents generate higher risk‑adjusted returns than higher‑rent properties, while a University of California, Berkeley Haas School of Business report showed that energy‑inefficient properties are significantly more likely to default than those that make energy and water efficiency improvements.

Together, they indicate that affordability and sustainability are not just social goals; they are material financial variables that can be measured and assessed.

But more needs to be done.

The Multifamily Impact Council Research Initiative

In 2024, the Multifamily Impact Council (MIC) began a research initiative to dig deeper and focus on how specific impact‑driven practices might affect performance and risk at the property level. Our goal is to combine the operating history and experience of the MIC community with the analytic rigor and methodologies of leading business schools and research institutions across the country.

Last month, the NYU Stern School’s Center for Sustainable Business (CSB) published the first research report from this initiative, examining how resident‑focused and sustainability‑oriented impact practices influence financial performance in multifamily housing using CSB’s Return on Sustainability Investment (ROSI) methodology.1 Our initial findings are important because they begin to quantify the financial value of specific impact practices at the property level using terms that investors understand. Higher economic occupancy. Lower operating expenses. Stronger risk management.

What the NYU Stern CSB Study Examined

Using the ROSI methodology, the research team at CSB evaluated specific practices aligned with the Multifamily Impact Framework2 that property owners were deploying across their properties. Through multiple case studies with members of our MIC community, the research assessed how each practice influenced financial outcomes at both the property and portfolio level.

The research questions were straightforward:

Can impact practices be measured not only by their social and environmental benefits, but also by their contribution to operating performance and risk management?

Do these practices create measurable financial value that supports long‑term asset stability?

And the initial answer to each question was, for the most part, yes.

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Housing Stability supports NOI

One of the strongest and most intuitive findings is that housing stability drives financial performance.

• At properties serving residents eligible for Section 8 assistance, implementing housing support plans led to higher, more consistent revenue flows and lower costs related to legal actions, vacancy loss, and turnover.

• Residents who used rent‑splitting services stayed approximately three months longer on average than residents who did not, producing higher rental income, reduced turnover, and lower bad debt in a business where small changes in retention can materially affect NOI.

In practical terms, a resident who can remain stably housed is not only better positioned to improve their own life; they also reduce the property expense associated with vacancy, delinquency, legal proceedings, and high frequency unit turnover.

Resident Services are Effective Tools for Managing a Property

The research also shows that resident services can reduce risk and accelerate income stabilization when they are integrated into a property’s operating model rather than treated as an add‑on program.

• Placement services that help residents who may not meet typical application criteria supported faster rent‑up, higher rental income, and helped reduce eviction, marketing, and bad debt costs.

• Health‑related services, such as telehealth offerings delivered through the property, were associated with longer average lengths of stay and, in turn, stronger operating efficiency and lower vacancy and turnover costs.

• Higher levels of resident engagement and participation in community programming correlated with higher rental income and lower bad debt, reinforcing the link between resident wellbeing and asset performance.

The broader lesson is that resident services should not be treated as peripheral programming disconnected from core operations. When designed well, they function as an operating‑expense efficiency tool that reduces instability, improves payment predictability, and supports long‑term asset performance.

Sustainability Practices are Expense Management Practices

The study also confirms the financial relevance of sustainability investments.

• Solar installations improved operating efficiency, with payback periods of roughly five years when government incentives were included and about ten years without incentives.

• Retrofit strategies reduced embodied carbon by roughly 2.6 times compared with new construction while lowering utility and operating costs.

For affordable housing, this reframing is critical. Sustainability is often seen as an added cost or compliance obligation. The NYU Stern CSB analysis suggests a different, more practical perspective: sustainability can be a tool for expense management, risk mitigation, and long‑term asset preservation. For owners with limited ability to raise rents, lower and more predictable utility and operating costs directly affect the property’s financial resilience.

The Power of Stacking

Perhaps the most important takeaway is that these strategies work best as an integrated system rather than isolated initiatives. Affordability is the baseline, but affordability alone does not capture the full value proposition.

When owners stack practices from across the Multifamily Impact Framework, housing stability services, resident support, engagement programs, and sustainability investments, they can move multiple financial levers at once. Retention improves, turnover costs fall, revenue becomes more predictable, bad debt declines, utility costs decrease, and risk is better managed. The result is a compounding effect on NOI.

The financial case for impact investing in multifamily housing is not that every individual program always pays for itself in isolation; it is that a well‑designed operating model can align renter stability with financial performance in ways that improve the long term durability of the asset.3

Why This Matters to Institutional Capital

For institutional investors, these findings have real implications.

Impact‑oriented affordable housing is too often seen through a narrow lens: does it meet an impact objective, and does it come at the expense of financial performance? The NYU Stern CSB work identifies a more accurate question: does it meet an impact objective that supports financial performance, and can it be measured consistently across portfolios?

Because impact investments must do more than improve lives and strengthen communities, they must also encourage investors to do more.

This is where the work being done by the Multifamily Impact Council matters.

Our Multifamily Impact Framework maintains industry standards based on a common language for defining, measuring, and reporting impact in rental housing, and our research initiatives help explain and quantify how applying the framework at the property level translates into better risk management and long‑term value.

Together, these actions can help move multifamily impact investing from a decision based on values to a decision that is rooted in economic fundamentals.

What Comes Next

The CSB report is the first in a series of research and case studies that the Multifamily Impact Council will be producing with NYU and other leading research institutions across the country. Not only will this enable us to build a more robust library of research to inform the industry, but it will also enable us to develop a more consistent approach and methodology for collecting and analyzing property level data that connects financial value creation with social and environmental impact.

Impact practices should not be treated as separate from the fundamentals of multifamily operations. They are essential components of a well-managed multifamily housing property and portfolio. They can improve lives, build stronger communities, and make money.

Do well. Do good. Do more.

The logic makes sense. But it is incumbent on us to make the case.

Over the past twelve months, a quiet but meaningful shift has started to happen in the affordable multifamily housing sector. Large pensions, foundations, family offices, and other long-term investors are allocating more capital into affordable multifamily housing investments that make the property more sustainable and improve the financial health and housing stability of the people who live there. They are not doing it because someone convinced them it was “the right thing to do”. They’re doing it because they recognize that investments in properties that conserve energy, waste less water and have more renters who can afford to pay rent on time perform better and more consistently across economic and credit cycles.

To help sustain that shift and make it scale, the Multifamily Impact Council (MIC) created the industry’s first and only common framework of impact investing standards for the multifamily sector. The framework establishes establish common definitions and reporting guidelines to provide investors, property owners, and policy-makers with a common language to assess and measure the financial and social benefits of affordable multifamily housing.

Since it’s introduction to the market in 2023, the Multifamily Impact Framework has been downloaded for use by over 600 organizations across the United States and is helping to turn what was once a messy and fragmented corner of the real estate market into a real, credible and investable asset class.

Here are some recent examples of how this approach is working and and setting the stage for more investments in the years to come.

Pension Funds

CalPERS, the giant California public employees’ pension fund, recently expanded a separately managed account with Nuveen focused specifically on affordable housing, bringing its total commitment to roughly half a billion dollars. This isn’t a side pocket. It’s not a “social experiment.” It’s a business strategy that focuses on long-duration, income-producing affordable multifamily assets that generate stable cash flow and credit performance over time.

The logic is straightforward: public pensions have long-dated liabilities and need predictable cash flow. Affordable housing delivers both. If you’re managing money for retired teachers and firefighters, it’s a safe bet1.

New York State Common Retirement Fund is heading in a similar direction, committing capital to Related Fund Management’s affordable housing vehicle. Again, the story is preservation, repositioning, and long-term value creation over time.

Then you have pooled structures like the American South Real Estate Fund, which is deploying capital on behalf of large public pension plans via intermediaries like GCM Grosvenor to invest in affordable and workforce housing assets.

All of these investments are good things to be doing. None of them would be happening if the underlying financial performance wasn’t there.

Endowments and Foundations

The California State University Endowment2 recently made a significant financial investment with the Bridge Investment Group - joining an ever growing list of university endowments who are are making strategic long-term investments in established affordable housing investment platforms.

Foundations are also getting in on the action. The Annie E. Casey Foundation, for example, has invested in a fund designed by Enterprise Community Partners to preserve affordable rentals while sharing a portion of property-level profits with long-term residents. This is not a one-time grant or rent concession3 , it is long-term private capital seeking profitable returns by improving the financial health and stability of the people who call their building home.

Family Offices and High Net Worth Individuals

Family offices, especially those with a stated interest in affordability and sustainability are also starting to put real weight behind affordable housing managers.

The Ballmer Group’s recent investment in funds managed by Avanath and the Vistria Group - targeting affordable and workforce housing - is a good example. This is not a donor-advised fund sprinkling grants. It’s a sophisticated investor backing experienced partners with successful track records.

Large family offices often play an outsized role in maturing an asset class. They can move faster than pensions, they’re more comfortable with emerging strategies, and they are often explicit about tying impact to long-term value creation. Once they’re in, it becomes much easier for bigger funds to follow.

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Big Corporations and Large Employers

Amazon is an excellent example of a large employer who recognizes that their corporate success depends on maintaining a stable workforce with access to affordable housing. Through its Housing Equity Fund, the company has deployed more than $2.25 billion across Northern Virginia, Nashville, and the Puget Sound region with top-notch affordable housing managers such as Mercy Housing, LEO Impact Capital and the Clear Blue Company. Already, these efforts have helped create or preserve over 10,000 affordable homes in Seattle alone - many with 99-year affordability requirements baked in.

The company’s broader community investments reinforce the same theme: food-security funding, emergency-response support, and new facilities like Rainier Valley Food Bank all strengthen the foundation residents rely on to stay housed and stable. These aren’t just nice-to-have gestures; they’re a corporate acknowledgment that housing stability, community health, and workforce resilience are tightly linked to maintaining a stable and profitable business.

Profits Don’t Preach

For years, affordable housing was presented to investors as a moral imperative. Not surprisingly, that approach doesn’t work for investors with fiduciary responsibilities. But when you flip the pitch from “saving the world” to “strengthening the portfolio” those same investors are much more likely to pick up what the affordable multifamily housing industry is putting down.

And these are the things that belong in every affordable housing pitch to institutional investors:

• Investor returns rely on people paying rent: Real estate investment returns don’t materialize out of thin air4, they come from people who pay rent on time and properties that don’t waste water or electricity. And when property owners invest in making properties more efficient and increasing the financial health and stability of their renters - they are not just improving lives and reducing greenhouse gas emissions. They are protecting your cash flow.

• Affordable housing diversifies real estate portfolios: Rent-regulated and subsidized assets behave differently across cycles than Class A market-rate properties. Their serious delinquency rates are lower and less volatile, and they are less prone interest-rate swings and overheated valuations.

  

• Creating impact is a risk-management strategy: Small investments in improving the financial health of renters, building performance5, and climate resilience help reduce bad debt, turnover costs, real estate taxes, utility bills and insurance premiums.

Investors should not ignore the social benefits. But we have to help them recognize that when property owners make buildings more sustainable and help renters improve their financial stability, they also just happen to be strengthening and protecting their financial investment.

Turning Unicorns into Horses

Asset classes with this kind of deep, symbiotic relationship between profit and purpose were once thought to be extremely rare. They were like unicorns. Hard to explain, difficult to quantify, and most people did not think they were real. The truth of the matter is that the affordable multifamily assets are not unicorns. They are horses. And if you know what you are doing and the conditions are right, they can thrive everywhere.

This is why we created the Multifamily Impact Framework6: To provide a common framework of clear definitions and consistent reporting standards that can be used as a field guide for the investors who are interested in allocating capital and the fund managers, property-owners and service-providers who are doing the work.

Crucially, the framework doesn’t just tell investors to invest “because it is a good thing to do.” Nor does it enable property owners to make empty and performative promises that don’t make things better (and often make things worse) for their renters.

It does help connect the dots between proven impact practices that create more affordable and sustainable communities and profitable, long-term financial returns and credit performance. And as more and more organizations use the framework to drive their impact strategies, it is becoming a universal translator that allows the affordable multifamily housing industry to demonstrate the unique way in which their asset class improves long term credit and financial performance in a language that institutional investors can assess and understand.

Good + Well = More

We’re still early. Affordable multifamily is not yet a fully defined box on every asset allocators menu, but a pattern is clearly emerging.

Pensions are scaling up. Endowments and foundations are proving concepts. Family offices are anchoring innovative investment strategies. Large corporations and employers are making larger and more significant long-term investments to support their workforce. And experienced affordable housing managers are proving that those investments make money because of their impact and not in spite of it.

When renters do good, investors do well. Maintaining a common framework of industry standards and reporting guidelines will help us all do more.

If you’ve read my first post in this series, you know our model at CMHDC. We acquire multifamily buildings on the open market in changing neighborhoods, preserve them as affordable rentals, stabilize them, and later refinance to fund the next acquisition. Our approach is significantly cheaper per unit than new LIHTC construction and faster to close, allowing us to efficiently and cost effectively serve working families.

The model isn’t the problem. The problem is sourcing equity capital.

Here’s why the equity capital matters. Acquiring a multifamily property isn’t complicated -any bank will finance a qualified borrower with a reasonable debt coverage ratio. The problem is that banks don’t finance 100% of the purchase. They want to see equity in the deal, typically 20% to 30% of acquisition cost, before lending. For a mission-driven organization preserving affordable housing at below-market rents, finding that equity is the biggest hurdle.

For a conventional real estate investor, equity capital comes from profits, partners, and a track record of returns that attract private capital. For a nonprofit preservation organization, the options are narrower, and the capital community sector hasn’t done enough to expand them.

What Government Can and Cannot Do

The instinct in the affordable housing community is to look to government to solve the equity problem. That instinct is understandable and sometimes right. But it’s worth being clear about the tradeoff: government funding makes housing expensive. It comes with compliance requirements, approval timelines, reporting obligations, and layered restrictions that add cost and complexity to every transaction. The $600,000 plus-per-unit new LIHTC development in Chicago isn’t overpriced because developers are inefficient. It’s priced that way because of requirements baked into the public programs that fund it.

Government can help without providing direct subsidies. Tax incentives can make an investment in a nonprofit’s acquisition fund equally or more attractive than a comparable market-rate deal, and regulatory changes can make it easier for banks to take equity positions in preservation transactions. Both approaches cost less than direct subsidy and could unlock significantly more capital than they cost.

Banks as Equity Partners

A year ago, CMHDC closed an acquisition with a local bank - Bank Financial (now First Financial) - as an equity partner. The bank believed in the mission, secured regulatory approval for their investment, and structured a deal in which they receive a modest annual return and their principal back at the end of a ten-year term. No waterfall distribution. No participation in upside from refinancing or sale. Just a modest return, mission alignment, and a CRA-eligible investment, and all of returns beyond their initial investment stayed with our non-profit entity so that we could invest in another transaction.

It worked. The building is being maintained as affordable housing. The bank got a CRA-friendly investment, and a deeper relationship with a well-run nonprofit. The transaction took less time to complete than it would have taken just toassemble the financing team on a comparable LIHTC deal.

This model should be replicable. The regulatory framework for bank equity participation in community development exists. The bank went to the Office of the Comptroller of Currency (OCC) and got approval to make an equity investment in the acquisition, with a provision that the end beneficiaries would be low-income individuals at 80% of Adjusted Median Income (AMI). They got approval from the regulatory agency to proceed and provided the needed equity to close on the transaction. Why? Because they believed in the mission of the organization and because we have been successfully using this model for decades. The difference is that in the past we provided 100% of the equity. In this instance we split it 50/50, which helped us close the financing gap and stretch our limited resources.

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What stops us, and other mission driven organizations, from doing more is simple. Finanical institutions are less likely to have an appetite for doing these deals if there is a limited track record of successful equity capital partnerships that give banks the confidence to approve them. Organizations like ours can help build that confidence based on our successful track record: At CMHDC, we have never lost money on a transaction, and we need more banks who are willing to have a conversation.

Foundations

Many major foundations have built their theories of change around human capital development - education, workforce, health. That’s legitimate work. But their theories rest on the assumption that the people they serve have stable places to live. In many of the communities where foundations work, that assumption no longer holds.

Housing stability is foundational - in the most literal sense - to the outcomes that foundations care about. A foundation that invests in early childhood education and then watches the families they serve become displaced by rising rents does not have a complete human capital strategy.

Recently, more and more organizations have recognized this and are making real and tangible investments in affordable housing preservation.

• The Annie E. Casey Foundation, in partnership with Enterprise Community Partners, created the Renter Wealth Creation Fund, to preserve affordable rentals while sharing a portion of property-level profits with long-term residents. That’s not a grant. It’s a structured investment that advances the foundation’s mission and generates a return. More foundations could be doing something similar.

• McKenzie Scott through Yield Giving has given billions of dollars to organizations that work in community development, many of which facilitate affordable housing and give non-profit organizations a respite from their constant struggle to raise funds for their operations. That kind of giving allows the non-profits to concentrate on delivering tangible results.

The argument isn’t that foundations should stop funding human capital development. It’s that they should recognize affordable housing preservation as a force multiplier to their work.

Employers

The least obvious opportunity is employers. Amazon’s Housing Equity Fund has deployed more than $2 billion in markets where its workforce concentration is highest - a direct recognition that corporate success depends on workforce stability, and workforce stability depends on housing affordability.

Most employers aren’t as big as Amazon. But the same logic scales down. All large regional employers hospital systems, universities, manufactures – have a significant percentage of employees who are spending more than 30% of their income on housing or commuting 90 minutes each way because they can’t afford to live near work. These employers have a direct financial interest in affordable housing preservation in the surrounding community. The question is whether they know how to do something about it, and whether the affordable housing sector is ready to show them.

Partnering with a nonprofit preservation organization as an equity investor - not as a donor, but as a capital partner with modest financial returns and meaningful community impact - is a model that works for the right employer and the right deal. It requires patient capital and a long-term relationship. It also requires an affordable housing organizations that can make the case in way that resonates best with the employer.

Family Offices

Family offices represent a different kind of opportunity. Many are actively looking for program-related investments that generate consistent returns while advancing a social mission, and affordable housing preservation is a natural fit. The investment profile is straightforward: a stable, cash-flowing asset in an appreciating market, with a nonprofit operator that has decades of demonstrated performance and no losses on the portfolio. The return expectations are modest by design, but the impact is concrete and local in a way that many family offices find compelling. Unlike a LIHTC fund or a large institutional vehicle, a direct equity partnership with an organization like CMHDC offers something harder to find: a real relationship with a real portfolio in a real community. For families that have built wealth in communities like Chicago and have a deep connection to where they live, that is not a small thing.

The Big Ask

The work CMHDC has done over the past 30 years demonstrates that our model is viable. The units are there. The buildings are there. The neighborhoods that need preservation are identifiable today. What is needed is equity capital from sources that haven’t historically thought of themselves as affordable housing investors - banks, foundations, and employers who understand that the workforce housing problem is also their problem.

Government alone will never solve this, but it doesn’t need to. Private capital is not the enemy and it must be part of the solution because it exists - in banks, foundations, family offices, and corporate balance sheets - and it is ready to be put to work. The only question is whether they are willing to roll up their sleeves and we are willing do the hard work of helping them get it done.

Rafael Leon is a regular contributor to the Affordable Housing Handbook and the Chief Executive Officer of the Chicago Metropolitan Housing Development Corporation, a non-profit real estate corporation serving the Chicago metropolitan area and dedicated to preserving affordable housing with a particular focus on emerging and changing communities.

You can learn more about the great work that Rafael and his team are doing in Chicago, here.

In late December of 2025, my organization, Partners for the Common Good, received an allocation of 65 million federal New Market Tax Credits (NMTC). Not only was this award a great holiday present, it also came with an increased sense of certainty that will enable the broader NMTC program to work more effectively in the future.

This award was part of a larger U.S. Department of Treasury accouncement that allocated a record $10 billion in New Markets Tax Credits - the largest single issuance in the program’s history. For community development practitioners, affordable housing advocates, health care providers, educators, and the low-income communities they serve, these awards were more than a budget line. They were a lifeline, arriving at a moment when other federal funding streams continue to be under severe and sustained threat.

The New Markets Tax Credit program stands as proof that market-based mechanisms can move serious capital into places that markets would otherwise abandon. The $10 billion awarded in December 2025 will finance hospitals and health clinics, schools, community facilities and affordable housing and job-creating businesses1, in communities across every region of the country. It will do so not because investors were charitable, but because the NMTC program made it a rational business decision to make.

A Program Born from Persistent Disinvestment

The New Markets Tax Credit program was created by Congress in December 2000, designed to address a chronic and well-documented problem: low-income communities - urban, rural, and tribal alike - are systematically bypassed by private capital markets. Vacant storefronts, crumbling health clinics, outdated schools, and absent grocery stores are not accidents of geography. They are the predictable results of decades of market failure and public disinvestment.

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The NMTC program was built on a deceptively simple premise: give investors a compelling reason to put money into places they would otherwise ignore. In exchange for making equity investments in certified Community Development Entities (CDEs) - financial intermediaries that channel capital into distressed communities - investors receive a federal tax credit equal to 39% of their investment, claimed over a seven-year period. CDEs, in turn, deploy that capital as below-market loans and equity investments into businesses, housing projects, health facilities, schools, and community centers in qualifying low-income census tracts.

For every dollar the federal government effectively “spends” through foregone tax revenue, significantly more private capital flows into underserved communities. Historically, NMTC awards have generated approximately $8 of private investment for every $1 of federal investment2 - a multiplier that few public programs can match. A project with $10 million in eligible costs may generate up to $2.5 million in subsidized capital through an NMTC structure, dramatically reducing the need for conventional debt and equity financing that these projects typically cannot access.

Two Decades of Proven Results

In the 25 years since its inception, the NMTC program has quietly accumulated a remarkable record. Through its first twenty allocation rounds, the CDFI Fund made 1,667 awards totaling $81 billion in tax credit allocation authority. Across that history, the program has helped generate more than $143 billion in total development financing, supported more than 8,900 businesses nationwide, and contributed to the creation or retention of more than 888,000 jobs.

But numbers alone do not capture what the program has actually built. The NMTC has financed health clinics that now serve tens of thousands of patients annually in communities where the nearest hospital was an unaffordable distance away. It has funded charter schools in neighborhoods where quality education was a privilege of zip code. It has backed community food systems in areas classified as food deserts, manufacturing facilities that restored economic growth in postindustrial towns, and mixed-use developments that revived declining neighborhoods and commercial corridors.

The breadth of eligible project types - housing, health, education, childcare, retail, energy, manufacturing, food systems is a recognition that community resilience requires comprehensive investment across every dimension of daily life.

Demand for the program has consistently and substantially outpaced supply. Throughout its history, applications for NMTC allocation authority have exceeded available credits by a ratio of six to one, with fewer than one in four applicants receiving awards in any given round. This persistent oversubscription demonstrates the structural gap between the demand for patient, flexible capital that community financing needs and what the conventional market is able to finance on its own.

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A Historic Allocation and the Value of Certainty

The December 2025 award was a combined two-year round covering calendar years 2024 and 2025, with 142 Community Development Entities across 41 states, Washington D.C., and Puerto Rico receiving allocation authority. The round reflected a deliberate geographic breadth: 24.2% of the total will flow to rural communities, 26.8% to smaller urban areas, and 47% to major urban centers. Notably, $236 million was specifically committed to tribal areas.

The sheer scale of the most recent funding round reflects a meaningful and structural shift that was made possible when the NMTC program was made permanent under the One Big Beautiful Bill Act. For the first time in its history, the program will no longer face the uncertainty of periodic reauthorization fights, and communities, investors, and project developers will be able to act with a degree of long-term confidence that has never existed before. This permanence removes uncertainty and creates a stable foundation upon which the private sector can build upon with confidence.

A Beacon of Hope During a Time of Shrinking Federal Support

The timing of this historic allocation must be understood in its full context. Across the federal landscape, the funding programs that have long served as the foundation of community development finance are under unprecedented pressure. The Administration’s FY2026 budget proposed the outright elimination of the Community Development Block Grant (CDBG), a $3.3 billion program that has supported infrastructure, housing, and economic development in communities across the country since 1974. The HOME Investment Partnerships Program, which finances affordable housing development and preservation, faced elimination as well. The proposed budget also included over $290 million in cuts to the CDFI Fund itself. While Congress has pushed back on some of the most severe proposals, the uncertainty has been profoundly destabilizing for organizations that have built their work on the assumption of continued federal partnership.

Against this backdrop, the NMTC program’s permanence and its record $10 billion allocation represent something more than good news. They represent a viable anchor for the community development sector at a moment when other anchors are being pulled. The program does not operate through direct federal grants - it functions through the tax code, deploying private capital at scale in ways that are structurally more resilient to the annual appropriations battles that are consuming so many other programs.

This distinction matters enormously for practitioners. A nonprofit building a community health center in a rural county, a CDFI financing a mixed-income housing development in a former industrial city, a tribal economic development organization creating jobs on a reservation - all face the same fundamental challenge: a gap between what their projects cost and what conventional markets will finance. The NMTC program does not replace grants. But it fills a critical layer of the capital stack that no other federal tool addresses as efficiently or at as large a scale.

A Force Multiplier for Community Development

For organizations navigating this new landscape, the most important insight about the NMTC program is not what it does in isolation - it is what it enables in combination. The credit is specifically designed to be layered with other public subsidies and private financing. It can be paired with the federal Low-Income Housing Tax Credit (LIHTC) for housing projects, with historic rehabilitation tax credits for adaptive reuse projects, with state and local tax incentives, with philanthropic capital, and with conventional debt. The NMTC does not demand exclusivity - it rewards inclusivity.

A community health center that cannot qualify for a conventional construction loan at viable rates can use NMTC financing to reduce its effective cost of capital by 15 to 25 percent, making the project financially feasible. A community college in a rural area building a workforce training facility can layer NMTC with state economic development incentives and federal education grants to close a financing gap that would otherwise kill the project. A nonprofit housing developer can use NMTC-enhanced financing for the commercial and community facility components of a mixed-use development, freeing other capital for the affordable residential units.

This leverage potential is the program’s most underutilized feature, particularly among smaller organizations and communities that lack dedicated capacity to navigate complex tax credit transactions. The Community Development Entity network - now operating across 41 states with fresh allocation authority - is the access point. Organizations that have not yet established relationships with CDEs serving their markets should prioritize doing so now, particularly as the upcoming CY2026 allocation round approaches and CDEs are actively identifying pipeline projects.

The Road Ahead

The NMTC program is not a silver bullet. It cannot replace the grant funding or subsidy that the most vulnerable communities depend on for operating capacity, social services, and direct housing assistance. A tax credit that requires sophisticated investors and complex legal structures to execute is not inherently accessible to the smallest or most resource-constrained organizations without technical support.

For community developers, CDFIs, mission-driven lenders, nonprofit developers, and the communities they serve, the work now is to ensure that capital reaches its destination and invested in buildings that change lives. The allocation has been made. The clock is running. The communities are waiting.

Laurie Schoeman is the Chief Investment and Impact Officer at Partners for the Common Good. A highly respected leader with deep expertise in housing policy, finance, and climate resilience, Laurie previously served as a Senior White House Policy Advisor and held leadership roles at Enterprise Community Investment and Enterprise Community Partners.

But the two most important lessons I learned came from watching my mom.

My mom was born in Germany during World War II. When she was five years old, Allied forces bombed the house where she lived with her family. She was the only one who did not make it to the shelter in time. Some of her first memories are of being pulled from the rubble.

Near the end of the war, her family fled Berlin to escape the advance of Russian troops. They walked across the German countryside, avoiding roads and traveling through fields until they reached the home of a family friend. My grandmother sold family heirlooms for food and played the organ at church. My mom and her sisters took care of their little brother, avoided AWOL soldiers, and played with the aluminum chaff that fell from the sky during bombing raids.

After the war, they were moved to a Marshall Plan refugee housing camp. That community gave them something my mother had never experienced: safety, stability, and a normal life.

This is where my mom grew up. She made friends. She went to school and went on to become a librarian.

(Above: The only picture we have of my mom (middle) and her two sisters in their Marshall Plan refugee camp.)

In her mid-twenties, she immigrated to the United States to visit her sister. She fell in love with our wide open spaces and decided to stay. She taught herself English by watching the Ed Sullivan Show. She met my dad. Together they raised three kids and gave them the kind of childhood that she could only have dreamed about.

After my siblings and I left home, my mom went back to school, earned her bachelor’s degree and then a master’s degree. Afterwards, she ran a nonprofit that helped small-town entrepreneurs launch their own businesses. She eventually ended her career the same way it began – as a librarian.

My mom is kind and gentle. She suffers no fools. She has zero patience for excuses.

She is ridiculously humble and always working. Never mean and resilient as hell.

Two of the most important lessons I have ever learned came from my mom. Like most good lessons, they apply to every part of life. And like all great lessons, they always ring true.

“Life is hard. Figure it out”

I can still remember the first time my mom said this to me. I was a kid, on the cusp of middle school, drying dishes1 while my mom cleaned the kitchen. I had just finished complaining about the extra homework our teacher had given us because some of the other kids in class could not stop talking. When I finally stopped, she paused what she was doing and said: “Life is hard. Figure it out”

I would hear these six simple words a lot over the course of the next ten years and, while I may not have always liked to hear them, they would always eventually sink in. And what amazes me to this day is how my mom was able to deliver this simple message without a hint of frustration or judgement. She was simply stating a fact. Life is difficult. Things break. Plans fail. People disappoint. Markets crash. Bombs fall.

And because these things are all bound to keep happening, life leaves us with only one option: we must figure it out.

My mom’s approach was simple: If you do not know what to do, figure out a way. Read a book. Do your research. Ask someone for help. Learn from the people who have been there before. Observe the world. Ask the extra question. Pay more attention. Move through life with intention.

The answers to life’s questions may be hidden, but that does not mean they do not exist. They are everywhere, but only if we choose to look.

“Find The Good”

Life can often be hard, and for many people it is both systemically and unfairly harder than for others. My mom definitely experienced more than her fair share. But she made it abundantly clear to me that while there were many reasons to disagree or get angry with other people, there was never a reason to be unkind. There was good to be found in everyone. Even the jerks.2

That mindset feels especially important today. As our disagreements have become louder, it has become far too easy to shield ourselves from divergent points of view and simply assume the worst about those who see the world differently. It has become a lot harder to remember that being wrong is not the same thing as being bad.3

Sometimes I think that the only two things we have left in common is a talent for hearing only what we want to hear and an endless ability to never admit when we are wrong. But if my mom and her friends could spend their childhood making toys out of the stuff that bomber pilots dropped on them, then I have to believe that we also all share an innate capacity to find the good in all things and all people.

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The Great Financial Crisis of 2008

At this point, I would not be surprised if some of you are wondering what color the sky is in my world, and that would be fair4. But these two simple lessons have guided me through a lot of tough moments in my career, and they were especially helpful when the global economy melted down in 2008.

I was reminded of this time recently while talking with an old friend.

We first met in 2008 during the early days of the financial crisis. I was a young vice president at Fannie Mae, trying to lead a team through the chaotic times of conservatorship. He was trying to keep his small business alive while the economy unraveled around him.

We faced different problems and worked in different parts of the economy, but we shared a common challenge of how to survive without screwing everything up.

In the early days of the crisis, we often talked about how to manage our teams and keep everyone focused through a crisis that did not seem to have an end in sight. I shared with him the story of my mom, and we decided that we would ask our teams to focus on five simple things:

1. Come to work in the morning.

2. Make a list of things to do.

3. Do those things.

4. Be kind to others.

5. Come back to work tomorrow.

It was not a perfect plan. It did not always work, but it got the job done. Fortunately, surviving a financial meltdown is a pass/fail class.

When the crisis finally ended and life got back to normal, my friend and I would joke that we had learned a set of skills to survive a “generational event” that we would never need to use again.

Then the pandemic arrived. And now we find ourselves again in another period of unprecedented political upheaval, economic uncertainty, and institutional distrust. And the best advice I can offer anyone is the same as it was twenty years ago.

Go to work. Do your job. Don’t be a jerk. Come back tomorrow.

Life is hard. Figure out. Find the good.

And don’t forget to call your mother.

They’re navigating that reality every day. In conversations with community members, local officials, media, and partners, they’re often working through very different assumptions about what housing should look like and who it serves, without a shared understanding of the term itself. Over time, that disconnect shapes what gets built, what gets blocked, and how long it takes to make progress.

This lack of understanding of what “affordable housing” actually means may seem at odds with the kitchen table conversations many Americans are having about housing costs, the bipartisan dialogue heard about housing in elections at all levels of government, and the media’s focus on the housing and homelessness crises affecting urban, rural, and suburban communities alike. “Rents are too high.” “Homeownership is out of reach.” “I can’t live near where I work.” And yet, despite this widespread concern, public understanding of how affordable housing can address these challenges remains limited.

To better understand what’s driving this disconnect, HPN partnered with researchers at the University of Florida’s Center for Public Interest Communications (CPIC) to take a closer look at what the general public understands—or misunderstands, as is often the case—about affordable housing. We surveyed people across the country, as well as housing developers and advocates, to identify where perceptions break down and how those gaps make it harder to establish a shared narrative about the challenges communities are facing1.

One of the first things I noticed in the responses is that there is no commonly understood definition of affordable housing. Yes, people see that homes are too expensive; 71.4 percent of people surveyed reported that affordability has worsened compared to a few years ago, and more than 44 percent know someone struggling to find a place they can afford. But beyond that, the definition starts to shift depending on who you ask.

Bias related to race and class continues to shape how people think about housing. Our research confirmed a long-standing bias against renters in many communities despite the fact that 46 million households rent their homes, and rental housing plays a critical role in local economies. We also heard questions about how nonprofit housing organizations are viewed and whether bias affects how their voices are heard.

But affordable housing on its own is still an abstract idea. People interpret it through their own experiences and assumptions, which can make it harder to garner shared support for building needed housing in their communities.

Our research partners characterized the view of housing as a “wicked problem.” It’s an academic term used for challenges that are deeply complex and interconnected. That’s exactly what HPN members see every day.

This lack of clarity goes beyond semantics and gets at how we make the realities of housing more visible and easier to understand. When housing markets stagnate or communities don’t have enough homes people can afford, the impact shows up in who can stay, who has to leave, who gets left behind, and how a community functions over time.

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Sharing impact

Data is helpful in this, but it’s people who really tell the story. Teachers can’t afford to live near the schools where they work. Construction workers can’t live near job sites. First responders are priced out of the communities they serve. These are everyday signposts for how housing shapes the quality of life for families and communities.

We need to be talking about affordability more broadly and not just as an asset class. The median age of a first-time homebuyer is now over 40 because younger people can’t afford to buy. There are only 35 affordable homes for every 100 very low-income families looking to rent nationwide. At the same time, many older adults find themselves stuck as costs rise and their homes become harder to manage.

All of these realities point to the same underlying issue. The solutions may differ, but when housing no longer aligns with the people who live and work in a community, the effects show up everywhere.

Our research also reinforced the value of local voices. They often carry more weight than national data or expert perspectives. We see that across our network: HPN members are in a strong position to lead these conversations with community groups, media, business owners, and policymakers, especially when they ground them in local impact.

What we can do differently

Toward that end, a few things in the research stand out:

• Speak less about units, projects, and housing as a catchall. These are conversations about people’s homes—their bedrock—whether that means an apartment, condo, townhome or single-family structure. While the technical distinctions may matter a great deal when crafting specific land-use regulations or federal housing policies, they matter very little for the stories of “home” that help people understand what is happening in their communities.

• Second, data is most effective when it’s grounded in real experience. A LIHTC development isn’t just serving households at a certain percentage of AMI. It’s serving daycare providers, grocery store clerks, warehouse workers, and first responders. Those connections make the issue more tangible.

• And finally, there’s an opportunity to be clearer about the broader impact. Housing development and preservation don’t just address need; they shape how local economies function. They influence jobs, spending, local businesses, and the strength of a community in ways that people understand when they’re made clear.

We’ve spent a lot of time thinking about what this means. For me, it doesn’t change why we do this work. Our focus on people with the most urgent housing needs remains at the center. But this research is a reminder that we can be more effective when those realities are part of a broader conversation about how housing affects entire communities.

The message doesn’t have to be complicated: when we unlock housing, we unlock economic opportunity. That’s the simple truth, and there are thousands of local stories that help illustrate it.

You’ll be hearing more from HPN in the coming months, along with tools to support our members in leading these conversations in their own communities. We know this is long-term work. Shifting how people understand and talk about housing doesn’t happen overnight, and much of that progress happens through the steady, local efforts our members are already leading. In the meantime, I’d welcome your perspective on what’s working and where you’re seeing challenges.

Robin Hughes is the chief executive officer of the Housing Partnership Network, whose affiliates include the Housing Partnership Fund, Housing Partnership Ventures, the Housing Partnership Insurance Exchange, Framework Homeownership®, and the Charter School Financing Partnership. Highly regarded as an industry leader with 35 years of experience in affordable housing and community development, she possesses deep expertise in advancing public policy at the local, state, and federal levels.

The most cost-effective units of affordable housing in Chicago were not built last year. They have been there for years, and we are saving it.

Over the past decade, the city’s affordable housing conversation has been almost entirely about new construction: LIHTC developments, inclusionary zoning, density bonuses, and the billion-dollar programs designed to make them possible. That conversation is not wrong. It’s just incomplete. And the gap in that conversation has a price tag.

A typical Low Income Housing Tax Credit (LIHTC) transaction in Chicago now exceeds $600,000 per unit. That number reflects real costs - construction labor, land, financing complexity, and the overhead of navigating layered public programs. It also reflects an assumption baked into how the field thinks about affordable housing: that the problem is shortage and the solution is production.

But our shortage of affordable housing is not just the result of not having enough, it is also about losing what we already have. And the solution must extend beyond production and include preservation.

For thirty years, the Chicago Metropolitan Housing Development Corporation (CMHDC) has been acquiring multifamily buildings in neighborhoods where working families live and where market pressures are beginning to erode affordability. We rehabilitate them, stabilize rents below market, and manage them as long-term affordable housing — without relying on public subsidies. We have preserved more than 1,000 units across many Chicago and suburban communities at roughly half the per-unit cost of a comparable LIHTC development.

The people we house are what some call the “missing middle” — families who earn too much to qualify for publicly subsidized housing, but not enough to afford market rents in neighborhoods with good schools, reliable transit, and access to jobs. The average annual household income in our portfolio is around $54,500. These families are not in crisis, but they are one rent increase away from displacement, and the affordable housing sector has very few programs designed specifically for them.

How the Model Works

The mechanics of our strategy are straightforward. We identify multifamily properties — two-flats, six-flats, courtyard apartment buildings in neighborhoods that are on the cusp of market change. We analyze each transaction the way any disciplined real estate investor would: cash flow before debt, cap rate, property condition assessment, and operating expense assumptions. The difference is that our pro forma uses below-market but non-subsidized rents, because that is our mission. We determine how much debt the property can support and then we identify equity capital to close the gap.

When we have equity, we can close in 90 days. That speed - made possible precisely because we are not navigating public program requirements - is a distinct competitive advantage. Sellers know we can execute, and we can move on opportunities before they disappear.

After acquisition, we stabilize the property which typically includes some light rehabilitation and manage it for the long term. When the property appreciates and refinancing becomes available, we pull equity out and redeploy it into the next acquisition. The cycle repeats. Real estate investors call this the BRRRR method: Buy, Rehabilitate, Rent, Refinance, and Repeat. We take the same approach. The difference is that we never send our equity out the door. It just goes back into the next preservation deal.

We have been doing it like this since the mid-1990s, one building at a time. Today, our portfolio has more than $100 million in assets and serves more than 2,500 people.

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What Makes Our Approach Different

The mechanics of what we do are similar to what any small-building investor does. The goal is different. A private investor acquiring a property without rent restrictions in an appreciating neighborhood will likely choose to maximize rents as the market rises - a perfectly rational approach. We do not. We preserve affordability. The building stays affordable because that is what our organization exists to do, not because a regulatory agreement requires it.

This matters for the broader housing ecosystem. When private capital acquires these buildings without an intentional approach to preserve their affordability, the affordable units disappear - sometimes at once and sometimes through gradual rent increases over several years. Either way, new construction cannot replace those affordable units at anything close to the same cost, and the community loses them.

Albany Park is a useful example. It is one of Chicago’s most diverse neighborhoods, home to a large concentration of low- and moderate-income renters, and a place where the two-to-four unit buildings that have historically anchored its affordability have been disappearing, converted or replaced by single-family homes at prices far beyond what working families can absorb.

CMHDC has been acquiring buildings in this neighborhood since 2002. Today we serve 196 families in Albany Park - in buildings that we have held and maintained as affordable housing for more than two decades - with an average household income of around $54,500. This is what preservation looks like at the neighborhood level.

What the sector is missing

LIHTC will always have a role. New construction addresses shortage in markets where preservation cannot. But preservation is cheaper, faster, and reaches a population that public programs often do not touch. Chicago loses affordable housing faster than it builds it - by some estimates, up to 1,000 units a year. Building a few hundred new units annually isn’t closing that gap. In fact, the gap just keeps getting wider. A policy agenda that focuses almost entirely on new construction, while the existing stock quietly disappears, is not a housing strategy. It is a treadmill.

Chicago already has hundreds of the small multifamily buildings we are talking about. Many of them are in neighborhoods where affordability is under pressure right now. The question is not whether our model works - the growth in our portfolio over the past 30 years shows that it does.

The question is whether policymakers are interested in solutions that make it easier for equity capital to fund more of these efforts at scale.

Rafael Leon is the Chief Executive Officer of the Chicago Metropolitan Housing Development Corporation, a non-profit real estate corporation serving the Chicago metropolitan area and dedicated to preserving affordable housing with a particular focus on emerging and changing communities.

You can learn more about the great work that Rafael and his team are doing in Chicago, here.

We don’t have enough affordable housing. The system is broken. We need to raise awareness. We need more legislation. We should wait until after the next election.

Over the last decade, countless words have been written, thousands of strongly worded letters have been drafted, and millions of tons of carbon dioxide have been emitted into the atmosphere by planes carrying people into our nation’s capital to tell their elected officials that America needs more affordable rental housing.

And yet, the number of people who pay more than half of their income on rent has grown from 11 million people in 2015 to 12 million people today.

I guess if there is a lesson to be learned from the last ten years, it is that we do not need another report or press conference to tell us that we suck at making rental housing more affordable.

What we do need is to find better ways to make it easier to build, own and operate more affordable housing.

And the good news is that in cities and states across the country, people are beginning to do just that.

Less Talk + More Action=/__u/housingimpact.substack.com/More Housing

In states and communities across the country, people are doing more than just talking about affordable rental housing. They are rolling up their sleeves, sharpening their pencils, and creating it. In 2024 alone, more than 91,000 income-restricted apartment units were completed nationwide, the highest annual total in at least a decade. And, over the full 2020 to 2024 period, the country delivered nearly 310,000 affordable apartments. While these numbers are nowhere near enough, they are a good start.

Importantly, this growth is fairly widespread. While large coastal markets like New York and Seattle continue to produce significant numbers of affordable units, some of the fastest growth has come from places like San Antonio, Phoenix, Charlotte, Atlanta, and Austin.

The communities that succeed all have one thing in common. They recognize that they must do more than ask for more subsidies, they also must simplify the application and approval process and create financing structures that attract more private investment capital.

Our legacy programs still matter. The Low-Income Housing Tax Credit is still the backbone of deeply affordable production. But the next phase of housing policy cannot rely on federal subsidy programs alone. The challenge has grown too large, costs have risen too far, and the need now extends far beyond households traditionally served by traditional federal affordability programs. Teachers, home health aides, public employees, service workers, and other working households increasingly are getting stuck in a cruel economic purgatory: They make too much to qualify for traditional rental housing subsidies and they do not make enough to afford market-rate rental housing.

That is where the conversation gets more interesting. Because across the country, a few public models are beginning to show how to make affordable housing more available to everyone who needs it.

Los Angeles County: Time Is Money

Los Angeles County offers one of the clearest examples of how streamlining and simplifying the process can reduce costs and increase affordable housing supply. The L.A. County Affordable Housing Solutions Agency (LACAHSA) was created to function as a one-stop financing shop for affordable housing. Instead of sending developers on the usual scavenger hunt across multiple city, county, state, and quasi-public agencies, LACAHSA bundles tools in one place: construction loans, permanent loans, rental subsidies, and other financial products.

That may sound like an administrative tweak. It is not. It goes straight at one of the least glamorous but most expensive problems in affordable housing: fragmentation.

Affordable housing finance often works like a bureaucratic obstacle course. A developer needs money from three, four, sometimes five different public sources. Each one comes with its own application, timeline, legal agreements, underwriting standards, and compliance requirements. The result is delay, duplication, and cost. Research from the Terner Center for Housing Studies at Cal-Berkeley found that, in California, each additional public funding source delays a project by roughly four months and adds about $20,460 per unit. On a 100-unit project, that is more than $2 million in extra cost created not by materials or labor, but by wasting time.

LACAHSA is trying to cut through that. In its first major round of housing funding, the agency approved just over $100 million for 10 projects supporting more than 500 affordable units. Just as notable, it is prioritizing projects that can break ground quickly and reduce development costs. Early results suggest that projects relying primarily on LACAHSA funding are coming in below typical county cost levels.

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The deeper point extends far beyond LA County, and it shows how streamlining the administrative process can be hardcore housing policy. Every month we save, every duplicative step we remove, every layer of financing we do not need means lower costs, less time, and a more efficient use of taxpayer dollars to build more affordable homes.

New York City: Putting Institutional Capital to Work

If LA County offers a lesson in how to reduce unnecessary costs, New York City offers a lesson in the value of attracting institutional investment capital.

Recently the NYC Comptroller’s office announced that the city’s public pension funds would invest more than $4 billion in affordable housing over the next four years.

That matters because one of the biggest bottlenecks in housing is not policy approval. It is capitalization. Plenty of projects have political support. What they lack is the long-term institutional capital that is needed to make the project a reality.

By putting more institutional investment capital to work, New York City is filling that gap to create and preserve affordable rental housing in one of the highest cost housing markets in the country.

What is most significant about this investment, however, is not that is a huge amount of money. It is the investment rationale that lies behind it.

Like all institutional sources of capital, New York City’s pension funds have a fiduciary responsibility to their investors - the public sector employees who have trusted them with their retirement savings. And because the most impactful thing that a pension fund can do is make sure that retirees get their monthly pension check, they cannot make concessionary investments that put their retirees at risk.

And this is what makes the affordable housing sector so unique. It is the only asset class in commercial real estate where long-term affordable housing policy goals and profitable investment returns can overlap. It is what allows New York City’s pension funds and a growing number of institutional investors around the country to treat affordable housing as a good asset class for long term returns that also happens to be really great for the people who live there.

The larger implication here for policy makers is simple. Instead of making it harder for long-term institutional capital to invest in our communities, we should be making it easier. With the right underwriting, the right intermediaries, and the right product design, public officials can attract more private capital investors to support affordable housing that improves lives, creates community value, and meets their fiduciary obligations.

Massachusetts: Building a Better Capital Stack

MassHousing has long operated as the state’s housing and investment bank. That background matters because it means the agency already understands bonds, debt markets, and how to use capital markets to advance a public mission. Recently, they put that experience to work by creating the Bringing Innovation to Lending and Development (BILD) program.

The program was specifically designed to support the growing number of mixed-income projects in Massachusetts that are stuck in a financing no-man’s land. They are not deeply affordable enough to fit neatly into the tax credit model, but they are too affordable to fit into the traditional market-rate financing box. The only thing stopping these projects from getting done was that developers could not find a capital stack that made sense.

So, Mass Housing built one that did.

The BILD program provides a one-stop financing solution that combines privately sourced permanent debt with mezzanine level financing from an investment fund capitalized with the proceeds from a $50 million housing bond that puts public dollars to work in a private financing structure that can recycle and grow over time without additional subsidy.

Three Stories. One Simple Idea. Four Basic Principles.

Each of these three programs are excellent examples of how communities can make housing more affordable in their backyard. Los Angeles shows how to reduce the cost of fragmentation. New York shows how to bring institutional capital into the market without abandoning fiduciary discipline, and Massachusetts shows how a housing finance agency can redesign the capital stack and combine public equity investments with private debt financing to unlock mixed-income production.

Three different places. Three different approaches. Each one wrapped around the simple idea that affordable housing policy works better with private capital than it does without it.

Housing markets are unique. Political realities are always changing, and not all capital sources are the same. But the operating principles of getting deals done do not change:

1. Never underestimate the value of a quick and consistent execution: The longer a project spends moving across agencies, applications, and approvals, the more expensive it becomes. Time is not neutral in housing finance. Time is cost, and cost is bad.

2. Expand the utility of public funds: Grants and deep subsidies will always be needed, especially for the deepest affordability tiers. But they should sit alongside investment-oriented tools that can support a broader range of projects and households. There are more tools in a toolbox than a hammer and a screwdriver. We should use them all.

3. Make it easier for institutional capital to invest in long term affordability: Pension funds, institutional investors, endowments, and other long-duration capital sources are far more likely to allocate capital to affordable housing projects when public agencies create housing programs that are reasonable, easy to use, and aligned with real risk-adjusted return expectations.

4. Reward Execution: Public agencies should not just care whether a project is eligible for subsidy, but whether it spends the subsidy efficiently. True success is not measured in how much we spend, but how much we create.

As more state and local governments embrace this approach, we will not only create more affordable housing in our communities, but we will also build a broader housing finance system that is faster, less costly, and better capitalized.

The recent production numbers suggest that these principles are taking hold, and that our state and local governments are continuing to lead the way. While they are not yet at the level we need, they are proof that progress is being made.

If you are interested in learning more about the work that State and Local governments are doing to make rental housing more affordable, the Multifamily Impact Council will be hosting an open conversation with Mark Attia, Director of Capital Formation at Mass Housing and Paul Williams, Executive Director of the Center for Public Enterprise on April 30th at 12pm CST.

You can register for the call here.

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