Bending the Cost Curve on Affordable Rental Housing Development
The question of how to lower the cost of developing long-term affordable rental housing has important financial and policy implications. While a rich literature on regulatory barriers to affordability exists, much of it focuses on specific elements of constraint related to land use and zoning, process delays, and building codes. However, relatively little work has been done to examine how all of these issues, along with financing, interact with and affect affordable housing development.
In response to this critical knowledge gap, Enterprise Community Partners and the ULI Terwilliger Center for Housing launched a joint research effort in September 2012 not only to examine the various factors affecting the cost of developing affordable rental housing, but also to explore possible solutions.
The project team hosted a series of roundtable discussions in Chicago, Denver, Los Angeles, New York City, and San Francisco and additional interviews in Boston, Houston, Minneapolis, Pittsburgh, and Seattle. Throughout this effort, the research team engaged with nearly 200 key stakeholders representing both weak and strong markets, different population sizes and geographies, and a range of economic and policy environments.
The input of these stakeholders was invaluable to helping the project team identify the most common drivers of cost as well as best practices and new ideas for solutions to bending the cost curve. The result of this work was a report released in January 2014 titled Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals.
The executive summary provides a high-level summary of the full report, outlines key lessons, and identifies specific roles for different actors engaged in the development of affordable rentals.
This report provides a comprehensive examination of the drivers of cost and how they vary by market. In addition, this report offers a detailed set of recommended actions to bend the cost curve with the goal of moving toward a more efficient and lower-cost affordable rental housing delivery system.
The initial results of this work were featured in a report released in November 2013 at the ULI Fall Meeting in Chicago, IL. Bending the Cost Curve on Affordable Rental Housing Development: Understanding the Drivers of Cost identifies the most commonly cited cost drivers, provides a brief overview of their impact and applicability, and includes high-level recommendations to promote a more efficient delivery system.