The challenges of affordable housing are manifold. However this presents
an opportunity to private investors, real estate companies, and
developers. With the growing global trend for impact-based investments,
many institutional investors have begun to consider the merits of this
asset class.
This book examines not only the profitability of these assets, but also
whether these assets rely on government subsidy. It discusses why
investors have become more interested in this product and which
investment criteria influence the financial performance of these assets.
The authors employed a mixed method approach to collect data at two
tiers, first through surveys and afterwards through interviews of 8
firms (3 publicly listed companies, 3 private equity companies, 1
foundation, and 1 state bank) across Germany, the United Kingdom, and
the United States. Investment criteria are analyzed using inferential
statistics, specifically the Hierarchical Algorithm Cluster Analysis.
The financial characteristics of the companies are examined and compared
using descriptive statistics and the qualitative interview output is
explored using the thematic Latent Coding Analysis.
Furthermore, the book explains how the bond-like nature of affordable
housing is a profitable impact investment option, and how this strategy
is particularly worthwhile for institutional investors. It also
describes that profitability of affordable housing products is not
dependent on subsidy. Still, affordable housing products supported by
government incentives in the United Kingdom and United States are most
attractive. The book illustrates six important investment strategies
identified by veterans in this field to have an influence on the
financial feasibility of affordable housing products.
