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Disappearing Units: Why Affordable Apartments are Going Away
Each year, between 75,000-125,000 apartment units vanish from the U.S. inventory. The problem, however, is that these units often represent the most affordable apartments in their respective markets. This disappearing stock is exacerbating the already critical nationwide shortage of low-income housing, as the less-expensive housing is more likely than overall apartments to become lost inventory.
These units go away for several reasons, one of which is economic obsolescence. This happens when a property requires more repairs than the owner can afford. Other reasons include fire or flood destruction, or renovation out of existence.
There is some hope for apartment reclamation, however. Fannie Mae and Freddie Mac are jumping into the issue by offering loan programs geared toward helping property owners operate the Class B, C and D assets more efficiently. “There’s an overall shortage of affordable and workforce housing. Preservation is a way to address this need,” said Corey Aber, manager of community mission and impact finance for Freddie Mac Multifamily.
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