That was the headline in a recent New York Times article about America’s affordable housing shortage.
The headline comes from a new Housing Affordability Toolkit developed by the National Multifamily Housing Council and NYU’s Urban Lab. Its analysis puts the scale of the challenge in stark terms: more than 22 million U.S. renter households are rent-burdened. If we rely just on today’s affordable housing production tools, it will take well over a century to close the gap.
But the more interesting takeaway for multifamily developers may be this: the report argues that the problem is solvable, and that building more housing has to be part of the solution.
It Will Take More Than One Tool
The Toolkit points to three strategies working together:
- Build new affordable housing and expand assistance for households in need.
- Preserve existing naturally occurring affordable housing.
- Increase overall housing supply by reducing regulatory and other barriers that make development more expensive or prevent otherwise viable projects from moving forward.
That last point should resonate with developers. Regulatory burdens account for more than 40% of multifamily development costs. Entitlements, municipal fees, development requirements, and approval delays can all affect whether a project pencils or gets built at all.
Reducing those barriers can help. But so can making better use of the financing tools already available.
Where FHA Financing Fits
For affordable multifamily projects, FHA-insured financing can be an important part of the capital stack, offering long-term, fixed-rate financing, higher leverage, and other advantages that can help make a project feasible.
No financing program can solve the nation’s housing shortage on its own. Closing the gap will require moving more projects from concept to construction and putting the right capital behind them.
That’s Where AGM Can Help
With decades of FHA multifamily experience, AGM helps developers evaluate whether FHA financing fits a project, understand how it can work alongside other affordable housing resources, and navigate the process from early feasibility through closing.
Have an affordable housing project in the pipeline? Talk with AGM early and find out how FHA can help make your project work.
About AGM Financial Services, Inc.
Family-owned with over 30 years of experience, AGM has closed over $10 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. From new construction to substantial rehabilitation to acquisition and refinance — for both market-rate and affordable projects — we can get the deal done. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.