A new report, sponsored by Affordable Central Texas and Wells Fargo, finds that rental apartments priced for a middle-income workforce (such as teachers, nurses and first responders) have a higher return on investment than higher-rent apartments. proves the current misconception that is low. A path for middle-income rental housing to become a competitive ESG investment.
The report defines the new asset class as middle-income rental housing (MIRH), or large multifamily rental properties occupied by tenants with incomes between 60% and 120% of median household income (MFI), At least half of the residents earn 80% of the MFI. Analyzing data from 2011 onwards, the report finds that MIRH properties outperform higher-rent rental properties, with an average unleveraged return of 9.4%, the lowest risk, and relative to other real estate asset classes. , the spread is close to 3%.
Total return vs. risk vs. major asset classes over the past decade from Q2 2011 to Q2 2021
“Demand for affordable rental housing for middle-income families is soaring as many people are unable to own their own homes,” he said. David Steinwedel, President and CEO of Affordable Central Texas. “At the same time, interest in environmental, social and governance investments is growing rapidly.”
In 2021, environmental, social and governance (ESG) funds accounted for 10% of global fund assets.according to New report by Bloomberg Intelligenceglobal ESG assets are $41 trillion by 2022 $50 trillion US ESG leads the way with over 40% growth over the past two years. $20 trillion 2022.
The report draws on data from the National Council of Real Estate Investment Fiduciaries Property Index and analyzes eight metropolitan areas from Q2 2011 to Q2 2021.
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Japan’s three major metros, New York, Los AngelesWhen Chicagodue to well-documented affordability challenges, there were not enough MIRH assets to allow analysis.
“We can’t afford to lose the people who empower our community. We have market solutions to market problems.” Steinwedel. “MIRH delivers consistent and predictable benefits that make a real difference in your neighbor’s life. ”
To read the full report with detailed information on methodology and MIRH performance, click here.