MODERATE-INCOME, WORKFORCE HOUSING

As part of our Impact Housing strategy, Centre Urban targets existing or purpose-built workforce housing for moderate-income tenants earning between 60% and 120% of the area median income, where majority of the renter population resides. However, very little new supply constructed for moderate-income residents. Most new multifamily development has targeted either luxury, high-income tenants or very low-income tenants. This does not provide the most crucial middle steps for renters to climb the housing ladder, further worsening the Housing Crisis.

​This is referred to as the “Missing Middle”. 

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OUR THESIS

Centre Urban's Impact Housing strategy believes that the following macroeconomic and societal changes will create opportunities to both create investment value and address two of the most pressing societal issues we are facing at the moment: the Housing Crisis and the Climate Crisis. We wholeheartedly believe that we can do well while doing good through Impact Housing.

Capital Market Dislocations

Invest in Long-Term Markets with Significant Disconnects Between Housing Supply and Demand

• Production of housing has lagged renter demand for decades in key gateway markets due to strict zoning, arduous approval processes and environmental regulations.
• Governmental agencies are beginning to take note of the housing crisis and are implementing development incentive programs to spur construction of more housing.

Cyclical Headwinds and Capital Market Dislocation will Provide Significant Arbitrage Opportunities 

• Increasing interest rates has spurred a price discovery environment for real estate investments, creating an opportunity to secure favorable investment bases. 
• Moderate-income, workforce housing is traditionally seen as a recession resistant asset class that sees higher demand in downturns. 
• COVID-driven outmigration from cities has caused significant decline in urban asset values and investors are reluctant to invest in urban core (CBD) and urban edge assets. 

Societal Transformation​

​A Transforming Society will Force Real Estate to Adapt, Evolve, or go Extinct​

• McKinsey has reported that office attendance has stabilized at 30% below pre-pandemic levels and predicted a 26% decline in office values from 2019 to 2030, providing opportunities to reposition office assets for housing.
• ~54% of college-educated workers work from home on the average day in 2022. Renters prefer an average of 10% larger units and improved connect-ability to accommodate remote or hybrid work schedules; users are increasingly seeking out better experiences in the spaces they occupy.

The Real Estate Industry Cannot Continue to Ignore its Responsibilities to Society

• Real estate as an industry contributes to over 40% of global greenhouse gas emissions. Stakeholders must now be focused on achieving ESG goals.
• Future-oriented assets will be valued with a “green premium” and other assets will have a “brown discount”.
• Being proactive and focusing on positive environmental and social impacts will drive value and generate superior long-term returns.

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PROPERTIES CREATING IMPACT

Stevely Avenue Apartments

3849 Stevely Avenue, Los Angeles, CA 90008

Located in the West Los Angeles neighborhood of Baldwin Hills Estates, Stevely Avenue Apartments is a 8-unit multifamily complex. The property is subject to the City of Los Angeles Rent Stabilization Ordinance and provides housing at below-market rents. The Stevely Avenue Apartments is located within a five-mile radius of the Kenneth Hahn State Park, Jim Gilliam Recreation Center, Baldwin Hills Elementary School, brand new Kaiser Permanente and the Baldwin Hills shopping mall. 

More InfoRMATION

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Do you want to be a part of solving the Housing Crisis? Start investing here.

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