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Research Outline

Prepared for Tony | Delivered June 8, 2020

Affordable Housing Market Entry

Goals

To understand the Affordable Housing Industry, with regard to investment opportunities in the Bay area, it will be critical to understand how companies generate leads, any relevant state and federal grant financing options, and lending institutions. It is necessary to determine an experienced consultant versed in the real estate market to help with the process of market entry.

Early Findings

  •  Favorable market conditions and increasing institutional demand for real estate exposure have fueled significant growth in private equity real estate (PERE) funds.
  • The Bay area has 9 counties with California opportunity zones offering huge opportunities in residential and commercial real estate, with San Francisco falling into qualified opportunity zones in the East Bay and Oakland areas.
  •  Affordable housing has an attractive risk-return profile and is better positioned to perform through a recession than class-A apartments.
  •  Financing for affordable developments pulls money from several sources such as state and federal funding and tax credit sales to businesses.
  • Due to high and climbing housing costs in San Francisco, housing in Oakland is the highest in demand with home prices on the rise. A 24-story, 402-unit apartment tower opens near the MacArthur Bart Station in 2020. West Oakland, Uptown, Jingletown, and Coliseum Industrial experience as much active residential development as the West Oakland, 19th Street, Fruitvale, and Coliseum BART stations due to economic growth.
  • San Francisco Planning and the Mayor's Office of Economic and Workforce Development are collaborating with the City’s enterprise agencies to redevelop publicly-owned land into housing by structuring these projects as public-private partnerships.
  • There is a list of the private money lenders for real estate in the SF Bay Area - North Bay South Bay, East Bay, Peninsula and other areas. There is also a list of 153 Real Estate Investment Companies in San Francisco.
  • The following four consulting firms have experience in the Bay area: Seifel Consulting has completed more than 800 consulting assignments for public and private sector, Devine & Gong provides consulting services for non-profit development and affordable housing endeavors, Cornerstone Concilium specializes in providing project planning and design support services for housing development projects, and Novogradac & Company provides services specific to affordable housing.