% Affordable Housing Req. For EntitlementsSubscribe
For all the multifamily guys on here, can you share your experience with integrating some percentage of affordable (80% AMI) units into luxury multi product (a tower for example) in cases when you’ve had to to obtain necessary entitlements (height or density variance)? Is it as simple as underwriting the lower rent on the select affordable units and keeping the rest at market rate? On the capital markets side of the equation, have your debt and equity investors expressed concern over the affordable units or are more markets moving to this requirement? How about at exit—do you take a higher cap on exit as a result of the sprinkled affordable units, or does the lower NOI driven by those units naturally reduce the residual value? Sorry if I seem less than concerned with the affordable housing issue in America—I understand it needs to be addressed but also disagree with some of the methods cities are using to implement.