It will be most interesting to look back in a year and see if or how a new plan for a San Jose housing development comes to fruition. As the below linked article details, an apartment building acquired due to foreclosure is being turned into an affordable housing opportunity aimed at local public servants including teachers and police and fire fighters. One important element of the plan is to enable them to live in more reasonable proximity to their work while under affordable guidelines.
Although we do not know whether the idea was part of the acquisition criteria or as a strategy for the buyer, it holds a lot of merit. The buyer is able to market the opportunity to a specific audience, showing the need it fills before the specific amenities come into question. Potential tenants already have a built-in value (pun intended) of affordability and proximity, which may serve to overcome not having everything they have in mind. Someone had the idea to look into this, and then compile a Proposal which eventually brought the project to completion!
It might be worthwhile for some to go without certain amenities if it means saving an hour off the daily commute and/or a hundreds or perhaps thousands of dollars annually on rent. The buyer also gains a potential prototype for duplicating the concept elsewhere in the San Francisco Bay Area where their research deems feasible in the future. While having a clear audience, it will be up to the buyer to execute their real estate marketing skills to make it a success.
However, we are not pointing this out because of one buyer or opportunity. Some investors target or prefer affordable housing opportunities because of matters such as tax incentives and municipal goodwill in addition to the income opportunities. It why the first sentence above mentions monitoring the situation over the coming months.
A success story utilizing the concept of affordable housing serving local public servants could be the ticket for some investors in other cities. A local bank, credit union, or private lender might be ripe for funding or partnering the project to capitalize (pun intended!) on the goodwill and favorable publicity which would come with it.
Why are we giving out this idea?
It’s a reminder that you and your associates would probably not have known about this without our pointing it out. We found it as part of our daily research. Performing research by monitoring trends and the industry around the country is part of being “first in” on new and profitable real estate opportunities. It is who we are and what we do. It is what we can be doing to benefit you and your team!
