Masters Research Paper

The Workforce Housing Finance Playbook, Aaron Desatnik, UP 680, 12/12/14
1
Introduction
This paper explores the declining supply of workforce housing in high cost US cities and tools to
enable the development and preservation of it. Americans that came of age during the rise of industry
at the turn of the 20th
century were all but guaranteed working class employment, which provided the
backbone of the growth of middle-income neighborhoods. Since the 1970s, however, the downward
pressure that outsourcing has placed on manufacturing jobs has led to a decline of middle-class
neighborhoods1
. According to The Brookings Institute, “In 1970, middle-income neighborhoods made
up 58 percent of all metropolitan neighborhoods, by 2000, the percentage had declined to 41 percent,”
and today is even lower.2
Another way to understand this shift is the increasing gap between rents and
incomes (Exhibit A). “Since 2005, the median gross rent [in New York City] increased by almost 11
percent while the median household income of renters rose by only two percent.”3
Exhibit A: Index of Median Gross Rent and Income, New York City
4
In addition, declining government subsidies have increasingly shifted the burden to the customer.
1 The Week Staff. “Where America’s jobs went” [Online]. Available from:
http://theweek.com/article/index/213217/where-americas-jobs-went [Accessed 9 December 2014].
2 Rosan, Richard. Housing America's Workforce: Case Studies and Lessons from the Experts. Washington, D.C.:
Urban Land Institute, 2012. Print, p11.
3 Furman Center For Real Estate & Urban Policy. “Renters and Their Homes” [Online]. Available from:
http://furmancenter.org/files/sotc/SOC2013_Renters.pdf [Accessed 9 December 2014].
http://furmancenter.org/files/sotc/SOC2013_Renters.pdf [Accessed 9 December 2014], p33.

2
New York City’s Mitchell-Lama program provided 269 income-restricted buildings for middle-income
residents. But due to the hot real estate market and the ability to raise rents to market value after 1974,
more than a third of owners have exited the program and taken their properties to market (Exhibit B).5
Also, more than 45% of housing in New York City is rent stabilized or regulated in some way, providing
a subsidy for many middle class New Yorkers but also distorting the market.6
“93 percent of U.S.
[economists] agreed that ‘a ceiling on rents reduces the quantity and quality of housing available.”7_
While substantial housing subsidies are available from local, state and federal governments, 85% of
these target low-income households that typically earn less than 60% of area median income.8
Exhibit B: Rent Burdened Households by Income Group, New York City
9
Further exacerbating the problem is increased demand for urban living from Millenials and Empty
Nesters, which has led to increased housing prices. Housing price appreciation has many causes in
5 Bach, Victor et al. “Closing the Door 2008: Subsidized Housing Losses in a Weakened Market” [Online].
Community Service Society. Available from: http://www.cssny.org/publications/entry/closing-the-door-2008
[Accessed 9 December 2014].
6 New York City Department of Housing Preservation & Development. “Mitchell Lama Program” [Online]. Available
from: http://www.nychdc.com/pages/Mitchell-Lama-Program.html [Accessed 9 December 2014].
7 Block, Walter. “Rent Control” [Online]. Library of Economics and Liberty, 2008, Print.
8 Furman Center For Real Estate & Urban Policy. “10 Issues For NYC’s Next Mayor” [Online]. Furman Center For
Real Estate & Urban Policy. Available from: http://furmancenter.org/files/NYChousing_MiddleIncomeSub.pdf
9 Furman Center For Real Estate & Urban Policy. “10 Issues For NYC’s Next Mayor” [Online]. Furman Center For
Real Estate & Urban Policy. Available from: http://furmancenter.org/files/NYChousing_MiddleIncomeSub.pdf

3
addition to increased demand, such as constraints to new development, inflow of foreign and
institutional capital to purchase assets, exclusionary zoning regulations and historically low interest
rates — collectively, they have pushed prices in cities such as New York City, Boston, San Francisco
and Washington, D.C. to historic highs.10_
From 2002 to 2012, New York City’s rental stock increased
by 5.8 percent (120,000 units), but the majority of newly constructed units rented at levels well beyond
the means of the average renter household.” Housing economists have long realized this, and have
determined that “filtering,” which enables less affluent people to move into high-end buildings as they
age (Exhibit C). The problem with relying on filtering is that it doesn’t always occur, in part because
increased demand pushes up rents for Class B product and because owners of such assets often
renovate them to Class A to generate higher rents.11
This confluence of lower incomes, lower subsidies
and higher housing prices is a recipe for unaffordability for “‘key workers,’ the school teachers, police
officers, nurses, janitors and sales persons who benefit by living in the communities where they work as
much as the community benefits from having them there.”
Exhibit C: Changes in the New York City Housing Stock
10 Furman Center For Real Estate & Urban Policy. “10 Issues For NYC’s Next Mayor” [Online]. Furman Center
For Real Estate & Urban Policy. Available from:
http://furmancenter.org/files/NYChousing_MiddleIncomeSub.pdf [Accessed 9 December 2014].
11 Gallagher, Maeve. “Demand for Class B Apartments in Washington area should remain steady” [Online]. The
Washington Post. Available from: http://www.washingtonpost.com/business/capitalbusiness/demand-for-class-
b-apartments-in-washington-area-should-remain-steady/2013/05/03/edadc53e-b107-11e2-bbf2-
a6f9e9d79e19_story.html [Accessed 9 December 2014].

4
12
Exhibit D: US Rental Price Heat Map
13
One potential saving grace was the Great Recession and the downward pressure it placed on
http://furmancenter.org/files/sotc/SOC2013_Renters.pdf [Accessed 9 December 2014].
13 Trulia. “Home Prices” [Online]. Trulia. Available from: http://www.trulia.com/home_prices/ [Accessed 9
December 2014].

5
housing values. However, it impacted different groups to different degrees (Exhibit D). “According to the
Case Shiller housing price indices, as of the middle of 2011, prices had fallen by 59 percent from their
peak in Las Vegas, while they had fallen by less than 10 percent in Denver.” Exhibit E demonstrates
this disproportionate impact in Boston and Miami, which shows that low-cost cities have been hit harder
than high-cost ones. Homeownership and equity losses have also been the most severe for young
adults and minorities, the groups also more likely than average to hold workforce occupations. This is
not to say that some people didn’t benefit from decreased home prices from the Great Recession or
prior housing downturns; but the sharp unemployment losses, home equity losses (at one point
amounting to $7 trillion) and stricter lending practices meant that the net effect of the Great Recession
was decidedly negative for workforce households.14
Exhibit E: High-Cost Cities Impacted Less Than Low-Cost
15
The future doesn’t offer much promise. “According to Moody’s/RCA Commercial Property Price
Index, [multifamily] property values increased by double digits for the fourth consecutive year in 2013,
14 Ellen, Ingrid Gould et al. “Housing and the Great Recession” [Online]. The Russell Sage Foundation and The
Stanford Center on Poverty and Inequality. Available from:
http://furmancenter.org/files/publications/HousingandtheGreatRecession.pdf [Accessed 9 December 2014].
15 Ellen, Ingrid Gould et al. “Housing and the Great Recession” [Online]. The Russell Sage Foundation and The
Stanford Center on Poverty and Inequality. Available from:
http://furmancenter.org/files/publications/HousingandtheGreatRecession.pdf [Accessed 9 December 2014].

6
pushing values above their previous peak.”16
While coastal cities have seen rapid growth in multifamily
construction in the past two years, high land and construction costs and pent up demand during the
recession have resulted in many of these buildings being targeted towards people at the upper end of
the rent distribution. “The 2011 American Housing Survey reports that the median monthly gross rent
for units built in the preceding four years was $1,052—affordable at the 30-percent-of-income standard
only to households earning at least $42,200 a year.”17
The problem is particularly challenging in areas
such as San Francisco where high incomes from the technology sector have pushed housing costs to
the highest in the US. “New rental housing appropriate to [the workforce housing] group, particularly for
families, is needed but not economically feasible to build in the Bay Area as the rents needed to
support new development are well beyond the levels that are affordable to the workforce.”18
According to the Current Population Survey, between the 2005 peak in homeownership and
2013, there have been more than one million new renters a year, twice the pace in any decade in 50
years (Exhibit F).19
“Increases in the 20 most rapidly appreciating rental markets averaged 6 percent”
compared with 3 percent for the country as a whole.” This proportional growth in renting is poised to
continue, as certain segments of the retiring Baby Boom generation look to sell their homes and
experience more active lives in urban areas.
Exhibit F: The Rise and Fall in Homeownership and Income Among Younger Households
16 Joint Center for Housing Studies of Harvard University. “The State of the Nation’s Housing 2014” [Online].
Harvard University. Available from: http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/sonhr14-color-
full.pdf [Accessed 9 December 2014], p4.
18 Urban Land Institute Terwilliger center for Workforce Housing. “Priced Out: Persistence of the Workforce
Housing Gap in the San Francisco Bay Area” [Online]. Available from: http://www.rclco.com/pub/doc/special-
report-2010-02.pdf [Accessed 9 December 2014], p20.

7
20
Defining Workforce Housing

8
“Workforce housing refers to housing that is affordable to moderate income households,
commonly defined as those earning 60 to 120 percent of the area median income.” This income band is
due to the 60% of AMI limit set by the Department of Housing and Urban Development (HUD) for
Section 8 and Low Income Housing Tax Credits (Exhibits G, H). However, HUD also has more granular
definitions for housing segments: “Very Low Income: up to 30% of AMI, Low Income: 30% to 50% of
AMI, Moderate Income: 50% to 80% of AMI, Workforce Housing: 80% to 120% of AMI. Cities across
the country such as Los Angeles, Nashville and Miami, have increased the income limit for workforce
housing to include those households earning up to and above 150%.”21
Alternately, states such as
California set the upper income limit by “calculating the annual income required to afford a median-
priced home in the community,” including the cost of debt. There is no universally agreed upon
definition of workforce housing.
Confusion about the definition is common. When I surveyed housing experts for my research,
several discussed projects that were exclusively affordable (<60% of AMI), even though I noted the 60-
120% of AMI range in the survey. The Federal Housing Finance Agency (FHFA) sets goals for
affordable housing, which specifically target lending to multifamily projects for those below 50 percent
of AMI. In an article by LISC, one of the leading affordable housing organizations in the US, the author
suggests using the term “‘workforce housing’ or ‘housing for teachers, retail workers, and medical office
workers’” in place of “affordable housing.” Equally vaguely, the Workforce Housing Coalition of the
Greater Seacoast “identified the beneficiaries [of workforce housing] as hard-working people in solid
jobs.” This definitional ambiguity is a key reason why workforce housing hasn’t become a political focal
point, even though election rhetoric heavily feature keywords such as “the middle class” and “jobs.”
Exhibit G: Low-Income Limits in High-Cost US Cities
City 60%, 1 Person 60%, 2 People 60%, 3 People 60%, 4 People

9
San Francisco 46,500 53,160 59,820 66,420
New York City 35,280 40,320 45,360 50,340
Boston 39,540 45,180 50,820 56,460
Washington, D.C. 44,940 51,360 57,780 64,200
22
Exhibit H: Rents in High-Cost US Cities
City Average Rent, 2 BR Average Rent PSF Low-Income Rent
San Francisco 3,413 2.70 1,956
New York City 3,288 4.32 1,440
Boston 2,418 2.26 1,454
Washington, D.C. 1,918 1.89 1,469
23 24 25
Exhibit I: Average Wages Typical Occupations Considered Workforce
Occupation Employment Annual Mean Wage
Elementary and Middle School Teachers 1,984,360 56,420
Police Officers 635,440 58,720
Office and Administrative Support Workers 1,366,510 53,690
Retail Sales Worker Supervisors 1,213,550 41,450
26
Most people are surprised to learn who is defined as qualifying for workforce housing (Exhibits I,
J). Advocates talk about public employees such as teachers and fireman. But these represent only part
of the workforce housing group. Young professionals in various jobs, retail salespeople, office and
administrative support workers and construction laborers, among other professions, often fall into this
category. Some municipalities, such as the New Hampshire Housing Finance Authority, specifically
excludes “age-restricted (elderly or senior housing) or developments in which a majority of the
proposed homes have fewer than two bedrooms” from the definition of workforce housing, so as to
“ensure that housing opportunities are made available for members of the workforce and their families.”
22 Novogradac & Company LLP. “Rent & Income Limit Calculator” [Online]. Available from:
http://www.novoco.com/tenant/rentincome/calculator/z4.jsp [Accessed 9 December 2014].
23 Rent Jungle. “Market Trends” [Online]. Available from: http://www.rentjungle.com/rentdata/ [Accessed 9
December 2014].
24 Harper, Steve. “What’s the Nation’s Median Rent – and How Much Space Will That Get You?” [Online].
Apartment Guide. Available from: http://www.apartmentguide.com/blog/rental-price-per-square-foot/ [Accessed
9 December 2014].
25 United States Department of Housing and Urban Development “LIHTC Database Access” [Online]. Available
from: http://lihtc.huduser.org/ [Accessed 9 December 2014].
26 Bureau of Labor Statistics. “Occupational Employment Statistics” [Online]. Available from:
http://www.bls.gov/oes/current/oes_nat.htm [Accessed 9 December 2014].

10
This speaks to the disconnect between many housing policies and actual demand.
Exhibit J: Demographics of New York City, 2013
Population 1-mi. 3-mi. 5-mi
Household Income: Median $90,650 $66,709 $58,185
Per Capita Income $60,434 $45,516 $37,905
Household income: $40,000 to $44,999 2,489 16,501 39,462
27
Importance of Workforce Housing
The significance of workforce housing goes beyond reducing the cost of living for a certain
segment of the population. Many school systems, especially in higher-income neighborhoods, have
struggled to retain teachers or have had to increase salaries due to the high percentage of their income
that the teachers had to spend on housing. Also, “studies have shown that as workers are forced to live
father and farther from their jobs, their productivity declines.”28
High real estate costs also make cities
undesirable because the cost of doing business increases, which can result in lost tax revenue and jobs
if the business relocates to a lower-cost locale. Given the bipartisan tendency to advocate for
supporting the “middle class” and “jobs,” it is little surprise that the majority of Americans (80%) support
increasing affordable housing in their communities.29
It’s important to note that focusing on the workforce segment does not mean the low-income
segment is less important. In fact, “over three-quarters of low-income renters were rent burdened,”
27
LoopNet. “Demographics for 211 W. 88th St, New York, NY 10024” [Online]. Available from:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/ListingDemographics.aspx?LID=19008699&SRID=515342
8971&PgCxtGuid=df07a038-2f91-4926-873c-
cb240a33f96f&PgCxtFLKey=SearchResults&PgCxtCurFLKey=Profile&PgCxtDir=Down [Accessed 9 December
2014].
28
Rosan, Richard. Housing America's Workforce: Case Studies and Lessons from the Experts. Washington,
D.C.: Urban Land Institute, 2012. Print, p13.

11
while that figure is only 30% for people of moderate income. However, there is a disproportionate
amount of subsidy and political rhetoric committed to low-income housing in relation to workforce
housing.
Research Objective
Although workforce housing impacts all Americans to some degree, there is a surprising absence
of current research on the subject. The leading voices on the subject, including the Center for Housing
Policy and the Urban Land Institute, haven’t published updated research since prior to the Great
Recession. The Urban Land Institute publications, while more recent, primarily aggregate developers’
projects rather than rigorously evaluate existing strategies and new opportunities. In addition, while
prior work provides a valuable summary of workforce housing tools and case studies, it is not specific to
high-cost cities, rental housing or finance, all of which are the emphasis of this paper. According to a
researcher at the Urban Land Institute, the Terwilliger Center for Housing’s Jack Kemp Excellence in
Affordable and Workforce Housing Award had to change its name and emphasis away from exclusively
workforce housing to also include affordable housing because of the limited number entrants for
workforce projects.
An evaluation of Internet searches on the topic bears this out. A Google search of the term
“affordable housing” generates 1,740,000 results, while one for “workforce housing” returns only
344,000 results (Exhibit K). Comparing the terms of Google Trends reinforces this differential (Exhibit
K). This finding partly reflects the diversity of synonyms for workforce housing such as “moderate
income housing.” However, the gulf is even wider in academic circles, demonstrating the limited
research on the subject. A Google Scholar search of “affordable housing” generates 99,100 results,
while a search of “workforce housing” generates a mere 1,460 results.
Exhibit K: Google Searches of “Affordable Housing” and “Workforce Housing”

12
30
Given the urgency and significance of the workforce housing shortage, this paper builds on the
previous publications of the Urban Land Institute, the Furman Center and other housing research
organizations to account for the impact of the Great Recession and the maturation of real estate
investing as an asset class, both of which have made it easier for more affluent people and groups to
buy property and more difficult for the workforce to buy and rent housing. During today’s historic
housing prices, like those of the peak in the mid-2000s, is precisely when innovation is needed to offer
housing to the workforce near the communities they serve.
Specifically, this paper highlights successful workforce housing projects and provides an easy to
use tool for developers, housing agencies, policymakers, consultants, investors, philanthropists and
other stakeholders to use to accelerate the development of workforce housing in high-cost cities. The
emphasis is on strategies that can be deployed to reduce the cost to develop and finance, increase
operating revenue, and decrease operating expenses, under the assumption that such savings will be
at least in part passed on to reduce the rent for the tenant.
Exhibit L: Percent of Homes Affordable to Families Earning the Median Income
30 Google. “Trends” [Online]. Available from:
http://www.google.com/trends/explore#q=workforce%20housing%2C%20affordable%20housing&cmpt=q

13
31
There are two distinct characteristics that differentiate this research. First, this paper focuses
exclusively on rental workforce housing in high-cost cities, primarily the coastal gateway cities of New
York City, San Francisco, Washington, D.C and Boston (Exhibit L). “In many localities, market-rate
housing that is affordable to working households does in fact exist, but it is often in substandard
conditions, or located in unsafe neighborhoods with poor schools — or both. Alternatively, affordable
market-rate housing can sometimes be found in what have become known as ‘exurban’ locations —
that is, areas that are at a significant distance from employment centers.”32
For instance, in the Bay
Area, households have a much higher likelihood of renting than in peer regions, due to the high cost of
homeownership.33
Coastal cities tend to exhibit the starkest housing price increments between urban
and ex-urban locations. Some studies have noted the decline in the need for workforce housing
because of decreased housing costs since the Great Recession. However, most coastal urban housing
markets have recovered and have exceeded their 2007 peak values.
The cost of public transit as compared to car ownership is the other motivation behind the
31 Moore, Samuel R. “Successful Strategies for the Private Development of Workforce Housing in New York City”
[Online]. Massachusetts Institute of Technology. Available from:
http://18.7.29.232/bitstream/handle/1721.1/68503/770673660.pdf?sequence=1 [Accessed 9 December 2014].
32
Rosan, Richard. Housing America's Workforce: Case Studies and Lessons from the Experts. Washington,
D.C.: Urban Land Institute, 2012. Print, p5.
33 Urban Land Institute Terwilliger center for Workforce Housing. “Priced Out: Persistence of the Workforce
Housing Gap in the San Francisco Bay Area” [Online]. Available from: http://www.rclco.com/pub/doc/special-
report-2010-02.pdf [Accessed 9 December 2014], p4.

14
emphasis on cities. When people are priced out, they endure long commute commutes and crowd into
housing, in exchange for lower housing costs.34
The Citizens Budget Commission (CBC) has
developed a metric, called location affordability, which combines housing and transportation costs to
compare the residential competitiveness of US cities. “[The Department of Housing and Urban
Development] suggests that households paying more than 45 percent of their income for housing and
transportation cannot afford the place they live.”35
Although moderate-income households pay a lower
percentage of their income towards housing and transportation, they are ineligible for housing
subsidies, which misrepresents location affordability. One of the major problems with transit-oriented
development is that “some of the communities surrounding major investments in transit have seen
property and land values rise rapidly.” There are some existing programs that help fund transit-oriented
development for the workforce — including Community Development Block Grants, Community
Challenge Grants, and FHA Mortgage Insurance — but the programs are limited and tend to favor low-
income residents. Transportation is not the only necessary living expense, but it is the least difficult to
estimate to combine with housing prices to identify an aggregate cost of living.
Finally, this paper focuses on renters due to the scale and fragility of this segment. While
housing values has made homeownership often as unattainable as renting, the most susceptible
population is renters. Workforce housing that does not impose a rent burden offers people the
opportunity to save for a down payment and provides a path to homeownership, as several of the case
studies will demonstrate. In addition, as one expert noted, “Subsidies are more rare for this income
range, but they do happen sometimes, particularly for homeownership.” Only 4 of the 18 (less than
25%) case studies in “Housing America’s Workforce” and only 4 of the 12 (33%) case studies in
“Developing Housing for the Workforce: A Toolkit” target rental housing. That being said, there are
cases in which tools can be applied to both rental and for-sale housing, so a few case studies are for-
35 Slavin, Peter. “Factoring Transit Costs into Housing Affordability” [Online]. Urban Land. Available from:
http://urbanland.uli.org/news/factoring-transit-costs-housing-affordability/ [Accessed 9 December 2014].

15
sale condo projects. Finally, “more than 90 percent of people in the United States rent a home at some
point in their lives.”
Paper Organization
This paper is organized as an easy to use tool to accelerate the development and to a lesser
extent the preservation of rental workforce housing in high-cost cities. In the first section, we will
discuss the tools — programs, policies, mechanisms and subsidies — that are being used to make
workforce housing possible. In the second section, we will review brief case studies that illustrate the
use of these tools to provide stakeholders with examples that they can refer to when selling a workforce
housing development concept or looking for a creative solution. This section also includes policy
recommendations to support the utilization of the aforementioned tools discussed for developers.

16
The Workforce Housing Finance Playbook
My academic research into the economics of workforce housing and professional work in
affordable housing finance have shown me how few housing professionals understand how to make
workforce housing make economic sense. If a developer buys a parcel of land for $600 PSF, few
housing professionals understand how to charge $1,500/month for a two bedroom and make what most
investors consider an acceptable return. Thus, creative public and private financing schemes are
needed to make the deal work.
The following section is a comprehensive list of the possible tools that developers can use to build
affordable, high-quality, economically feasible housing for the workforce. As previously mentioned, this
list is targeted towards urban rental workforce housing; however, many of the strategies are
transferable to suburban or for-sale housing. This section includes many tools that local, state and
federal government agencies provide to encourage developers to build workforce housing. In
exchange, governments typically request restrictions to rent to a specific income bracket for a period of
time (typically 10-30 years) or some other public benefit to ensure that the ultimate benefits of the
project go to the tenant, not just the developer. This section also includes innovative approaches to
reduce development costs, financing cost, operating expenses or increase revenue that do not involve
government support, including modular construction, open shop labor and condoizing rental buildings to
allow additional layers of financing.
Development Budget

17
1. Land Acquisition
Land typically accounts for 10-25% of total development
costs in high-cost cities and can make or break the
economics of a deal. For instance, in East New York, the
neighborhood that Mayor De Blasio identified to build
affordable housing, land prices tripled in the past year.
There are several programs and strategies to eliminate,
reduce or delay land development costs in order to
reduce the rents that developers must charge.
2. Predevelopment Costs
Development Fees
Construction Costs
Development, which includes hard and soft costs
associates with the design and development of the
property, typically accounts for the remaining 75-90% of
total development costs. Recently, construction prices in
New York, San Francisco and Boston have exceeded
$1,000/SF, a historic high that makes building anything
but luxury housing nearly impossible. Although most of
these cities favor union labor, they are partnering with
developers to offer other incentives to make workforce
housing an economical option.
Underwriting
3. Rental Income
Workforce housing has an income cap, so there is little
opportunity to increase rent/unit. However, innovative
practices such as mixed income, micro units and shared
equity models have enabled developers to make
workforce housing more feasible by increasing revenues.
4. Operational Expenses
While developers may be able to secure one-time
funding to build a workforce housing project, that project
must generate enough income to support its expenses
and debt service, if it’s to continue to operate. Despite
this there are limited programs to reduce operating
expenses, the predominant ones related to property
taxes and energy costs.
5. Financing
The cost of financing can have a major impact on the
economic feasibility of a project. For instance, the annual
debt service on a $1,000,000, 30-year, 5% interest is
$65,051, whereas the annual debt service on the same
1% interest project is $38,748, nearly half of the cost.
Over the life of the loan, that’s a $789,090 difference,
nearly the amount of the original loan principal. The cost
of equity can also be expensive, with traditional real
estate investors expecting 8-20% IRR, depending on the
asset. There are a number of measures to reduce the
cost of debt and equity, including tax-exempt bonds, tax
credits, and soft debt.
1) Land
A. Free/very low cost surplus public, abandoned, tax-delinquent or foreclosed land

18
a. Tool: Local and state governments can provide surplus public land available for free or
below-market cost for sale or as a ground lease. They can also make available for free
or below-market cost land that is vacant, is tax-delinquent or has been foreclosed on. As
little as two acres are needed to provide substantial workforce housing.
b. Case Study: Columbia Commons/Columbia Hicks Apartments: the City of New York and
the owner owned the land parcel 50/50. The City sold its surplus land at significantly
below market value, reducing the land basis to a level that enable the development of
condominiums at 20-50% of market value.
c. Policy Recommendation: Increase availability of surplus public land for projects that
provide significant amount of workforce housing, particularly during market downturns
when land is less expensive and land financing is scarce. Create publicly accessible
database of surplus public, abandoned and foreclosed land available for purchase or
ground lease.
B. Defer land payment for market rate units until construction complete
a. Tool: Local and state governments can delay payment required for sites until
construction completion.
b. Case Study: Rollins Square: The Boston Redevelopment Authority both deferred
payment of the land value and reduced the purchase price to the market value given
workforce housing rents.
c. Policy Recommendation: Offer the option for developers to delay payment for land until
construction completion.
C. Expedited permitting and planning process
a. Tool: Local and state governments can provide expedited permitting and planning
processes for projects that provide workforce housing.
b. Case Study: Renaissance Square: The developer worked closely with the county to
ensure that the project aligned with their vision and requirements. In turn, the county

19
expedited permitting from the typical 15 months to 9 months.
c. Policy Recommendation: Offer accelerated permitting and planning processes.
D. Low cost land through donations from charitable organizations or private enterprises
a. Tool: Charitable organizations or private organizations can provide free or below-market
cost land for development.
b. Case Study: The Hayes at Railroad Square: The Roman Catholic Archdiocese of Boston
contributed part of the land at no cost to reduce the overall land cost.
c. Policy Recommendation: Create online portal to connect philanthropic organizations and
housing developers.
E. Reduce land basis by selling land for market rate units to market rate developer
a. Tool: Developers can sell part of the site to a market rate developer to reduce the land
basis for the workforce housing units.
b. Case Study: Rollins Square: The non-profit developer used sales proceeds ($11M) from
the market rate condos to subsidize the workforce housing rental units, instead of using
the proceeds as the developer fee.
c. Policy Recommendation: Create online portal to connect housing developers.
F.Make it easier to transfer development rights
a. Tool: Developers can secure transferable air rights from owners of adjacent, or in the
case of special districts, nearby land parcels, to increase the buildable square feet and
lower the land basis.
b. Case Study: The Kalahari: Adjacent land owner Full Spectrum merged with The Kalahari
to enable a transfer of 85,000 square feet (80 feet in height) of development rights (for
$4M), of which all of the incremental space went towards workforce units.
c. Policy Recommendation: Expand parcels available to transfer development rights to.
G. Convert unsold condos into affordable rentals
a. Tool: During the recession, some local governments provided funding to convert unsold

20
condominiums, market-rate rental buildings, and stalled construction sites into affordable
and workforce housing.
b. Case Study: 23-10 41st Ave: Taking over from a stalled market-rate condominium
project, Queensboro Development leveraged the NYC Housing Asset Renewal Program,
which provided 20% of the capital to build 117 workforce and affordable housing units.
c. Policy Recommendation: Offer program similar to New York City Housing Asset
Renewal Program especially during market downturns.
2) Development
A.Use open shop labor or negotiate lower union labor costs
a. Tool: Several cities, such as Boston, are strong supporters of unions and as such often
public-private development projects require the use of union labor. Increasingly,
developers are using open shop labor for specific jobs (e.g. carpentry), and the threat of
losing business has made construction unions willing to negotiate lower rates.
b. Case Study: Since most major coastal cities tend to be both high-cost and bastions of
union labor, many projects involving public support require the use of at least some
union labor. As a result, the use of open shop labor is less common, though it is growing
in New York City and elsewhere due to exploding construction costs.
c. Policy Recommendation: Allow developers to use open shop labor for publicly
supported projects.
B.Take advantage of reduced development requirements
a. Tool: Local governments can reduce development requirements such as for parking
from the zoning code to enable developers to increase site density and offer below
market rate housing.
b. Case Study: The Box District: As a part of Massachusetts' 40R Smart Growth Zoning
program, the project was able to reduce parking minimums due to proximity to MBTA

21
public transit, which enabled the developer to include additional workforce housing units.
c. Policy Recommendation: Create program similar to Massachusetts 40R Smart Growth
Zoning program to reduce development requirements, especially parking. Clarify
development requirements to reduce delays due to misunderstanding.
C. Use sales tax exemptions through non-profit organization
a. Tool: Developers can either be non-profit organizations or partner with a non-profit
organization to receive a sales tax exemption on the purchase of building materials. In
the latter case, the non-profit has to be the sold equity owner until construction
completion. Different states have different parameters including the types of
construction contracts eligible for this subsidy.
b. Case Study: Rollins Square: Non-profit developer POUA used its 501(c)(3) status to
receive a sales tax exemption on the purchase of all building materials ($1.5M saved).
POUA structured limited partner investors as lenders to maintain 100% ownership of the
project in order to receive the sales tax exemption.
c. Policy Recommendation: Allow for-profit developers that partner with non-profit
developers to purchase materials tax-free.
D. Get fees waived and development fees reimbursed
a. Tool: Local and state governments can reduce or waive development-related fees such
as permitting fees, studies, school fees and municipal fees.
b. Case Study: Woods Corner: The Middle Keys Community Land Trust waived permitting
($35,200) and impact fees ($53,000).
c. Policy Recommendation: Reduce or eliminate development-related fees for workforce
projects in proportion to percentage of workforce units.
E.Expedite construction using modular construction
a. Tool: Developers can use modular construction products when construction schedule or
limited site space are primary concerns. The challenge with modular construction is that

22
the technology is still being developed so there can be delays or product failures.
Modular can offer significant savings in shipping costs (66% for Woods Corner).
b. Case Study: 30 Haven: The project used modular construction products called
Greenstaxx boxes that were stacked on site. This reduced the time and coordination of
construction, enabling the developer to complete construction in just 13 months.
c. Policy Recommendation: Provide guidance to insurers and courts on how to handle
modular construction problems.
F.Remediate brownfields and access tax credits
a. Tool: Many infill sites are potentially contaminated with toxic substances (brownfields)
and need to be remediated. Incentives such as the New York State Brownfield Cleanup
Program reduce the burden on developers to clean up the contaminated site prior to
construction by providing salable tax credits.
b. Case Study: The Box District: MassDevelopment Brownfield Redevelopment Fund
provided a grant to remediate the former industrial site.
c. Policy Recommendation: Offer funding and/or technical assistance to infill projects on
former industrial sites, since federal Brownfields Tax Credit program sunset in 2011.36
G. Sell off parking spaces
a. Tool: Developers can sell parking spaces to help finance the project, especially in high-
cost areas such as Manhattan where a parking space in a desirable area can cost
hundreds of thousands of dollars.
b. Case Study: Rollins Square: 277 parking spaces were sold, providing 20% of the
project's gross sales proceeds.
c. Policy Recommendation: N/A
36 http://www.epa.gov/brownfields/tax/

23
3) Income
A.Density bonus
a. Tool: Inclusionary Zoning is a commonly used density bonus tool to allow developers to
increase the FAR and height of a site in exchange for setting aside a certain percentage
of units (typically 10-20%) for workforce or affordable housing. Developers can also
seek zoning variances to increase density. Local governments can also offer special
density bonuses for offering community benefits such as mixed-use properties with
setbacks.
b. Case Study: Domino Sugar Factory: New York City Mayor Bill de Blasio approved the
$1.5B, 2,000-unit project in exchange for the developer adding 40 additional affordable
units.
c. Policy Recommendation: Offer voluntary inclusionary zoning program. Balance benefits
of increased number of workforce and affordable units with concessions provided to
developers. Establish program similar to Massachusetts 40B to increase density in
municipalities with low proportion of workforce and affordable housing.
B.Creative design to increase density
a. Tool: Creative designs can contribute substantially to meeting affordability requirements
on a limited site.
b. Case Study: South City Lights: In exchange for increasing the density to 20 units per
acre, the city required that the project offer continuous views of the bay from all units.
c. Policy Recommendation: Legalize micro units to enable increased density without
amendments to zoning code.
C. Leverage mixed income (e.g. 50/30/20) programs
a. Tool: New York City offers a unique program that encourages the development of
subsidized housing by offering significant incentives in exchange for setting aside 30%
of units for workforce housing and 20% for low-income housing. In exchange,

24
developers access a below-market first mortgage, 1% second mortgage, and low-
income housing tax credit equity.
b. Case Study: Tapestry: The New York City Housing Development Corporation offers an
innovation 50/30/20 program that offers low-interest loans as long as 30% of units are
set aside for moderate incomes, 20% for low incomes, and 15% of low income units for
very low incomes. This mixed income strategy enables the developer to qualify for Low-
Income Housing Tax Credits.
c. Policy Recommendation: Offer program similar to New York City 50/30/20 program.
D. Strategize for how to ensure wide enough band of affordability to reduce vacancy
a. Tool: In exchange for providing incentives, governments often deed-restrict income
eligibility for the subsidized units. Although HUD recommends that people not contribute
more than 30% of their income towards rent, such units are often priced at closer to
35% of their income, making the units comparatively less attractive and reducing
occupancy in the units.
b. Case Study: Gotham West: This new project in Hells Kitchen includes 682 units of
affordable housing, most of which are set aside for middle incomes. However, the rents
are 32.5-35% of qualified incomes, so potential renters have sought lower-priced
options, leaving several income-restricted units at Gotham West vacant.
c. Policy Recommendation: Amend income eligible to make more flexible to reduce
vacancy.
4) Operating Expenses
A.Sustainable and green building measures to reduce operating expenses
a. Tool: Local and state governments and private organizations often provide incentives to
build LEED or Energy Star certified buildings or to integrate sustainable building

25
strategies into the project. Approaches that specifically target electric, heating and water
bills can directly reduce the cost of housing and can reduce ongoing maintenance costs.
b. Case Study: Miller's Court: As a part of the LEED Certification program, the project
incorporates efficiency measures such as low-flow toilets, motion-sensing lights, Energy
Star appliances, and cogeneration to reduce utility expenses.
c. Policy Recommendation: Provide incentives and technical assistance for sustainability
measures that measurably reduce operating expenses.
B.Reduce property taxes
a. Tool: Owners of workforce housing often qualify for tax incentives to reduce operating
expenses and enable them to continue offering reasonable rents. Tax incentives can
include eliminating property taxes (421-a in New York City), freezing property taxes at
current levels (Enterprise Zone Tax Credits in Baltimore), providing a payment to offset
property taxes (Payment in Lieu of Taxes) and a transit-oriented development tax
exemption (Portland Development Commission).
b. Case Study: On the Park: Seattle's multifamily tax exemption program offered tax
abatements on the residential units for 12 years.
c. Policy Recommendations: Offer incentives to eliminate, reduce or freeze property taxes
in proportion to number of workforce units.
C. Access Tax Increment Financing to reduce capital improvement costs
a. Tool: Tax Increment Financing (TIF) districts are used by local governments to
encourage private development that would not happen without public subsidies.
Governments estimate the incremental property and sales taxes generated by the new
private development, and either use that capital to finance the issuance of tax-exempt
bonds for the project, or directly contribute it to the developer. TIF districts are typically,
though not exclusively, used on large projects.
b. Case Study: Portland Place: The City of Minneapolis' public works department

26
established a Tax Increment Financing district to allocate incremental property tax
revenue towards capital improvements around the property.
c. Policy Recommendation: For larger projects, establish TIF districts to directly support
infrastructure improvements around workforce properties such as public transit.
D. Subsidize repair costs
a. Tool: Some municipalities such as New York City provide low interest rate construction
loans to support the preservation of moderate income housing to prevent the units from
being run into the ground.
b. Case Study: Programs such as New York City's Mitchell-Lama Home Asset Renewal
program provide low interest rate construction loans to support the preservation of
Mitchell-Lama buildings, which has contributed $60 million since 2004 to preserve 7,000
units.
c. Policy Recommendation: Offer program similar to New York City’s Mitchell-Lama
program to generate reasonable economic returns for developing moderate income
housing, as well as Repair Loan Program to preserve these units.
E.Reassign infrastructure to shift capital improvements cost to government
a. Tool: Some sites require immediate infrastructure improvements and all will need capital
improvements to maintain the site over time. Developers can partner with local
governments to creatively designate such infrastructure as public so that they are not
responsible for capital improvements. In exchange, the developer can commit to income
restrictions to ensure that it is meeting the workforce housing need.
b. Case Study: The Cottages at Longborough: The developer worked with the City of
Charleston Department of Housing and Community Development to assign on-site
parking as public alleys, which shifted the maintenance responsibility to the city,
reducing future capital improvements.
c. Policy Recommendation: Allow developers to reassign certain infrastructure to public

27
use to reduce parking requirements and direct resources towards reducing rents.
5) Financing
A.Below-market rate loans
a. Tool: Local and state governments can issue tax-exempt bond financing or recycle
existing previously repaid tax-exempt bonds to reduce the interest expense for the
development. Tax-exempt bonds are typically limited to low-income housing projects
(sometimes up to 80% of AMI), but recycled bonds can be used in places such as New
York City to finance workforce housing units. Government agencies including the
Federal Housing Administration also offer other loan products, which is useful if private
lending is strained such as during the Great Recession.
b. Case Study: The Bookmark Apartments at the Hollywood Library: The City of Portland
issued tax-exempt bonds for the low-income component of the mixed income project,
which reduced debt service expense.
c. Policy Recommendation: Extend tax-exempt bond financing to projects with rents above
60-80% of AMI that do not typically qualify for low-income housing tax-exempt financing.
B.Soft debt/forgivable subordinate mortgages
a. Tool: Local, state and federal governments often offer subordinate mortgages that are
forgivable if senior debt is repaid by a certain date and the develop commits to long-term
affordability.
b. Case Study: Paseo Verde: The developer utilized the Federal Home Loan Bank AHP
program to secure approximately $1M in forgivable debt to meet the project's funding
gap.
c. Policy Recommendation: Create publicly accessible database of all soft debt programs.
C. Use New Markets Tax Credits (requires mixed use), Historic Tax Credits or Low Income
Housing Tax Credits (for mixed income)

28
a. Tool: The New Markets Tax Credit program is a new federal program (created in 2000)
that provides capital to commercial projects in low-income areas. The program is
applicable to workforce housing for mixed-use projects.
b. Case Study: Miller's Court: Federal New Markets Tax Credits (in additional federal and
state historic tax credits) covered 55% of financing for the project that includes both
housing and office space for teachers.
c. Policy Recommendation: Provide technical assistance to aid developers new to specific
tax credit programs. Create publicly accessibly database of all tax credit programs.
D. Get grants from government, private or non-profit organizations
a. Tool: Local and state governments and private organizations can provide grants and
forgivable or soft debt to provide funding that property income, tax credits, hard debt and
other financing tools cannot completely support. Funding can be most successfully
applied during predevelopment when lenders are unwilling to provide capital due to the
high level of uncertainty.
b. Case Study: 33 Comm: The project received funding from the city of Newton's
Community Preservation Act funds and a grant from the Massachusetts Affordable
Housing Trust Fund to meet a funding gap.
c. Policy Recommendation: Create publicly accessible database of grants.
E.Offer convertible equity to avoid taking on additional debt
a. Tool: The California School Boards Association Finance Corporation offers a unique
program called Certificates of Participation. The program allows the organization to
provide capital to school districts through a lend-lease arrangement with favorable terms
and no down payment.
b. Case Study: Casa del Maestro: The project utilized Certificates of Participation to
access significant amounts of capital without having to issue another bonds on the debt-
burdened parcel. The district was required to prove that the teacher workforce housing

29
project qualified as infrastructure.
c. Policy Recommendation: Offer alternative financing that does not technically qualify as
debt; require evaluation by independent Board to confirm validity of project in meeting
city’s housing objectives.
F.Use one bank to provide debt and equity
a. Tool: Several banks and financial institutions offer both debt and tax credit equity for
workforce or mixed income (with affordable) projects. By securing all funding from one
capital provider, the developer can typically reduce the overall cost of capital and legal
costs in contract negotiation and administration.
b. Case Study: Rollins Square: Commercial bank FleetBoston (now Bank of America) was
the lead lender for the construction loan and provided LIHTC equity.
G. Reduce or defer developer fee
a. Tool: Developers are partially incentivized through a fee that is a percentage of total
development costs. Typically this fee ranges from the high single digits to the low teens.
Developers can also defer the fee towards construction completion, getting paid out of
the proceeds of the permanent loan, reducing the amount needed for constructing
financing.
b. Case Study: Casa del Maestro, Phase II: Although similar projects usually include an
8% developer fee, Casa del Maestro, Phase II's developer fee was only 4%, which
reduced the overall costs of development and the loan amount.
c. Policy Recommendation: Similar to for Low-Income Housing Tax Credit Projects, limit
and partially defer developer fee in exchange for subsidies that directly reduce rent.
H. Condoize units prior to construction to enable multiple sources of financing
a. Tool: A unique strategy that developers can use is to condoize the property in order to
access multiple sources of financing. The condo structure enables the separation of risk

30
between lenders.
b. Case Study: Columbia Commons/Columbia Hicks Apartments: L&M Development
subdivided the site into six condominiums in order to secure multiple sources of capital
and prevent comingling of funds.
c. Policy Recommendation: Provide technical assistance to developers looking to use
creative legal and financial structures without requisite prior experience.
6) Supporting Strategies
Due to the complex financing needed to make workforce housing projects work, these projects
typically leverage non-financial tools. Although these are often not explicitly economic measures, they
can make or break a project. The following tools are important to supplement the aforementioned
financial tools.
A.Hire a public-private consultant
a. Tool: Consultants such as HR&A have intimate knowledge of public mechanisms to help
fund private development as well as the relationships to secure the funding.
b. Case Study: Casa del Maestro: Santa Clara Unified School District hired a consultant to
identify funding mechanisms given the existing debt obligations of the property, which
helped identify the Certificates of Participation program that was critical to the project.
B.Provide a path to homeownership
a. Tool: Due to the limited supply of workforce housing, owners can limit tenancy duration
and provide homeownership services to encourage people to build home equity.
b. Case Study: Casa del Maestro, Phase II: Housing is only available to teachers that have
been in the school district for less than three years, and teachers cannot live in then for
more than five years. After that time, the district provides mortgage assistance to give

31
teachers a path to homeownership.
c. Policy Recommendation: Offer free homeownership education classes to renters.
C. Create products that customers actually want to optimize income and limit turnover
a. Tool: Developers can increase demand for a workforce housing project by integrating
design elements that target the segment that the project aims to cater to. This can
include amenities such as community space, appliances such as in-unit washer/dryer, or
rooms such as a 1:1 bathroom to tenant ratio.
b. Case Study: Miller's Court: The developers learned early on that although teachers were
willing to have roommates, they each wanted a private bathroom. The project also
includes a community space, encouraging camaraderie, which the Baltimore school
system hopes will translate into significant longer teacher tenures. The project has been
100% leased since day one and has a 200-person waiting list.
D. Policy Recommendation: N/AFor hybrid rental/condo projects, use condos as collateral
a. Tool: Non-profit developers often do not have the collateral that banks require to secure
financing or favorable financing. For developers of projects that include a for-sale
component, they can use hold these assets in escrow as collateral.
b. Case Study: Rollins Square: The bank required that the developer assign the for-sale
units to escrow as additional collateral. If the revenue from the sale of market-rate units
did not meet projects, some of the workforce units would have to be sold as market rate.
c. Policy Recommendation: Provide loan guarantees that allow developers to use condo
units as collateral.
E.Create a strategic plan
a. Tool: In order to understand the needs of its constituency, local and state governments
can create a strategic plan to identify needs, set priorities and establish programs to
achieve these priorities.
b. Case Study: Tierra Contenta: The Enterprise Foundation facilitated the strategic

32
planning process, which included assessing local housing needs and providing technical
assistance to the city.
c. Policy Recommendation: N/A 37 38
Urban Land Institute, 2012. Print.
38 Urban Land Institute. Best Practices: Workforce Housing Development. Washington, D.C.: Urban Land
Institute, 2009, Print.

33
Case Studies
In this section, we will discuss the application of the aforementioned tools to case studies (Exhibit
M, N, O, P, Q, R). See the bibliography for additional information about projects and developers.
Exhibit M: Urban Rental Workforce Housing Case Studies
Project Summary
30 Haven
53-unit infill modular development in Boston suburb leveraging
state's 40R Smart Growth Zoning
Beckstoffers Mill Loft
Apartments
22-unit adaptive reuse project in Richmond, VA with three additional
phases to spur redevelopment in transitional neighborhood
Casa del Maestro
40-unit for teachers of the Santa Clara School District to reduce
turnover due to high housing costs
Casa del Maestro,
Phase II
30-unit project second phase of Casa del Maestro for teachers of
the Santa Clara School District
Columbia Commons/
Columbia Hicks
Apartments
95-unit rental/condo building in Brooklyn including community
engagement process and contextual design to overcome public
resistance
Gotham West
1,238-unit high-end building in Manhattan with artisanal food
market, roof deck and bicycle shop
Masonvale
156-unit project in Washington, D.C. metro area to recruit faculty
and staff for George Mason University
Miller's Court
40-unit factory conversion on brownfield site catered to teachers in
Baltimore City School System
Morgan Woods
60-unit garden-style project on Martha's Vineyard that uses "cluster
development" to disguise density
On the Park
268-unit high-density project in Seattle with ground-floor grocery,
café and underground parking
Paseo Verde
120-unit mixed-use LEED-ND Certified project at second-busiest
transit hub in Philadelphia
Q41
108-unit rental conversion of stalled condo project in Long Island
City using innovative New York City program
Rhode Island Row
274-unit mixed-use transit-oriented development in Washington,
D.C. and ground-floor retail on underutilized commuter parking lot
Tapestry
185-unit project in Manhattan's revitalized 125th Street corridor
using city's 50/30/20 mixed income program
The Balton
156-unit mixed-use project in rapidly-gentrifying area of Manhattan
adjacent to one of busiest transit centers
The Bookmark
Apartments at the
Hollywood Library
47-unit mixed-use infill transit-oriented development in Portland, OR
with public library and retail
The Century Building
60-unit office-to-residential conversion at heart of Pittsburgh's
Cultural District with LEED Certification
The Hayes at Railroad
Square
57-unit conversion of historic factory in Haverhill, MA, spurring 500
additional units downtown
Exhibit N: Rent Ranges for Case Studies

34
Exhibit O: Unit Mix of Case Studies
Exhibit P: Development Costs of Case Studies
500
1000
1500
2000
2500
3000
3500
4000
The
Bookm
arkApartm
entsatthe
Hollyw
ood
Library
BeckstoffersM
illLo
Apartm
ents
Casa
delM
aestro
The
HayesatRailroad
Square
M
iller'sCourt
Casa
delM
aestro
Phase
II
Paseo
Verde
The
CenturyBuilding
On
the
Park
Colum
bia
Com
m
ons/Colum
biaHicksApartm
ents
Q41
M
organ
W
oods
M
asonvale
The
Balton30
HavenTapestry
Gotham
W
est
Rhode
Island
Row
Rent Ranges

35
Exhibit Q: Area vs. Development Cost
39
39 Due to limited information, several estimates were made for square footage based on interview data and
publicly available planning documents.

36
Exhibit R: Case Studies List

37
Moving Forward
With the political victories of housing advocates Mayor Bill de Blasio in New York
City and Mayor Marty Walsh in Boston, it appears that the high cost of living in cities is
turning public attention to the problem of housing affordability and forcing developers to
contribute at least symbolic resources to subsidized housing. For instance, it is not
uncommon to come across daily news articles about apartments selling for $5,000 per
square foot ($13,333/month for an 800 SF apartment, affordable to households early
$320,000 with a 50% rent burden) or land selling in excess of $1,000 PSF. According to
one prominent apartment developer in Manhattan, it’s nearly impossible to develop
workforce housing with land costs greater than $200 PSF. It’s unlikely that this trend of
high land and development costs and high sales and rental prices will reverse in the
near term. Thus, developers need support from local, state and federal housing
agencies and policymakers in order to build housing for moderate-income people.
It’s helpful to look at the history of affordable housing development for lessons for
the workforce segment. Many of the most successful affordable housing developers,
including Related Companies, entered the business when tax incentives were more
generous prior to the Tax Reform Act of 1986. This reinforces the importance of public
programs to incentivize housing that would otherwise be uneconomical to build. Many of
these developers also expanded to mixed-income and market rate housing, benefitting
from the positive reputation they built with housing agencies and public officials when
building low-income housing. While it’s difficult to quantify the value of this political
capital, it often results in the making or breaking of a deal, such as the construction of
2,200 units at the former Dumbo Sugar Factory site in Brooklyn by Two Trees
Management. Finally, many of these developers include subsidized housing in their
portfolio to provide stable cash flows during market downturns. Many developers avoid
workforce housing due to the challenging economics and financing. However, for new

38
housing developers entering any of the major coastal cities, starting with workforce
housing can make it much easier to expand to more lucrative market rate housing.
Developers that choose to build workforce housing can leverage the tools
discussed above to reduce the cost of land, development, financing, operating expenses
and increase revenue for their projects. Some tools – such as a low-cost ground lease or
land purchase from government – are accepted practices that can make or break a deal.
Others – such as using open shop labor or modular construction – are less accepted but
offer enormous potential cost savings. Unfortunately, given the limited research available
and examples of workforce housing projects, this paper was unable to prioritize the
efficacy of each tool. Further research is needed to measure the range in economic
value in each strategy and the cost of executing each tool.
This research specifically focused on developers due to the limited resources
available. Nonetheless, it’s clear that policymakers and housing agencies play a key role
in the development and preservation of moderate-income housing. The policy measures
recommended in the playbook are intended to provide specific, defensible, clearly
scoped policies to reduce the friction that developers will face in building workforce
housing. Beyond these measures, however, possibly the most valuable support that
governments can provide is to create workforce housing objectives to the same degree
that they have for low-income housing, and to align their subsidy programs with these
objectives.

39
Bibliography
Bach, Victor et al. “Closing the Door 2008: Subsidized Housing Losses in a Weakened
Market” [Online]. Community Service Society. Available from:
http://www.cssny.org/publications/entry/closing-the-door-2008 [Accessed 9
December 2014].
Block, Walter. “Rent Control” [Online]. Library of Economics and Liberty, 2008, Print.
Bureau of Labor Statistics. “Occupational Employment Statistics” [Online]. Available
from: http://www.bls.gov/oes/current/oes_nat.htm [Accessed 9 December 2014].
Ellen, Ingrid Gould et al. “Housing and the Great Recession” [Online]. The Russell Sage
Foundation and The Stanford Center on Poverty and Inequality. Available from:
http://furmancenter.org/files/publications/HousingandtheGreatRecession.pdf
Fung, Amanda. “2nd
stalled project revived under city program” [Online]. Crain’s New
York Business. Available from:
http://www.crainsnewyork.com/article/20110718/REAL_ESTATE/110719917/2nd
-stalled-project-revived-under-city-program [Accessed 9 December 2014].
Furman Center For Real Estate & Urban Policy. “Directory of New York City Affordable
Housing Programs” [Online]. Furman Center For Real Estate & Urban Policy.
Available from: http://furmancenter.org/institute/directory/entry/housing-asset-
renewal-program [Accessed 9 December 2014].
Furman Center For Real Estate & Urban Policy. “Renters and Their Homes” [Online].
Available from: http://furmancenter.org/files/sotc/SOC2013_Renters.pdf

40
Furman Center For Real Estate & Urban Policy. “Subsidized Housing Information
Project” [Online]. Furman Center For Real Estate & Urban Policy. Available from:
http://datasearch.furmancenter.org/ [Accessed 9 December 2014].
Furman Center For Real Estate & Urban Policy. “10 Issues For NYC’s Next Mayor”
[Online]. Furman Center For Real Estate & Urban Policy. Available from:
http://furmancenter.org/files/NYChousing_MiddleIncomeSub.pdf [Accessed 9
December 2014].
Gallagher, Maeve. “Demand for Class B Apartments in Washington area should remain
steady” [Online]. The Washington Post. Available from:
http://www.washingtonpost.com/business/capitalbusiness/demand-for-class-b-
apartments-in-washington-area-should-remain-steady/2013/05/03/edadc53e-
b107-11e2-bbf2-a6f9e9d79e19_story.html [Accessed 9 December 2014].
Google. “Trends” [Online]. Available from:
http://www.google.com/trends/explore#q=workforce%20housing%2C%20afforda
ble%20housing&cmpt=q [Accessed 9 December 2014].
Harper, Steve. “What’s the Nation’s Median Rent – and How Much Space Will That Get
You?” [Online]. Apartment Guide. Available from:
http://www.apartmentguide.com/blog/rental-price-per-square-foot/ [Accessed 9
December 2014].
Joint Center for Housing Studies of Harvard University. “The State of the Nation’s
Housing 2014” [Online]. Harvard University. Available from:
http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/sonhr14-color-full.pdf
Jonathan Rose Companies. “Paseo Verde” [Online]. Available from:
http://www.rosecompanies.com/images/stories/projects/projects/Paseo_Verde/P
aseo_Verde_131111.pdf [Accessed 9 December 2014].

41
Loopnet. “Demographics for 211 W. 88th St, New York, NY 10024” [Online]. Available
from:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/ListingDemographics.aspx?
LID=19008699&SRID=5153428971&PgCxtGuid=df07a038-2f91-4926-873c-
cb240a33f96f&PgCxtFLKey=SearchResults&PgCxtCurFLKey=Profile&PgCxtDir=
Down [Accessed 9 December 2014].
Mapson, Dustin. “More Affordable Workforce Housing Breaks Ground in Santa Clara”
[Online]. Available from:
http://www.reuters.com/article/2008/06/02/idUS161947+02-Jun-
2008+BW20080602 [Accessed 9 December 2014].
Moore, Samuel R. “Successful Strategies for the Private Development of Workforce
Housing in New York City” [Online]. Massachusetts Institute of Technology.
Available from:
http://18.7.29.232/bitstream/handle/1721.1/68503/770673660.pdf?sequence=1
Myerson, Deborah. “Case Study: Masonvale at Virginia’s George Mason University”
[Online]. Urban Land. Available from: http://urbanland.uli.org/development-
business/masonvale-george-mason-university-virginia/ [Accessed 9 December
2014].
Nashville Civic Design Center. “Case Study: Workforce Housing” [Online]. Available
from: http://www.sitemason.com/files/lOHH5m/NCDC_WorkforceHousingCS.pdf
New York City Department of Housing Preservation & Development. “Mitchell Lama
Program” [Online]. Available from: http://www.nychdc.com/pages/Mitchell-Lama-
Program.html [Accessed 9 December 2014].

42
New York City Department of Housing Preservation & Development. “Q41” [Online].
Available from: http://www.nyc.gov/html/hpd/downloads/pdf/Q41.pdf [Accessed 9
December 2014].
New York State Department of Environmental Conservation. “Brownfield Cleanup
Program” [Online]. Available from: New York State Department of Environmental
Conservation [Accessed 9 December 2014].
Nonko, Emily. “Construction Wrapping up at Affordable Housing Development on 41st
Avenue” [Online]. Brownstoner. Available from:
http://queens.brownstoner.com/2013/11/construction-wrapping-up-at-affordable-
housing-development-on-41st-avenue/ [Accessed 9 December 2014].
Novogradac & Company LLP. “Rent & Income Limit Calculator” [Online]. Available from:
http://www.novoco.com/tenant/rentincome/calculator/z4.jsp [Accessed 9
December 2014].
Rent Jungle. “Market Trends” [Online]. Available from:
http://www.rentjungle.com/rentdata/ [Accessed 9 December 2014].
Rosan, Richard. Housing America's Workforce: Case Studies and Lessons from the
Experts. Washington, D.C.: Urban Land Institute, 2012. Print.
Ross, Casey. “Walsh pushes for middle-income housing” [Online]. Boston Globe.
Available from: http://www.bostonglobe.com/business/2014/05/26/walsh-
initiative-aims-boost-boston-middle-income-
housing/Qd3TgGF9fLAOJ5SZBnWYtJ/story.html [Access 9 December 2014].
Schwanke, Dean. “ULI Case Studies: Masonvale—Fairfax, Virginia” [Online]. Urban
Land Institute. Available from: http://uli.org/case-study/case-study-masonvale-
fairfax-virginia/ [Accessed 9 December 2014].
Sherman, Natalie. “City celebrates new units in O’Donnell Heights” [Online]. The
Baltimore Sun. Available from: http://articles.baltimoresun.com/2014-06-

43
03/business/bs-bz-odonnell-heights-20140603_1_subsidized-housing-public-
housing-low-income-housing-tax-credits [Accessed 9 December 2014].
Slavin, Peter. “Factoring Transit Costs into Housing Affordability” [Online]. Urban Land.
Available from: http://urbanland.uli.org/news/factoring-transit-costs-housing-
affordability/ [Accessed 9 December 2014].
Streeteasy. “Building: Gotham West” [Online]. Streeteasy. Available from:
http://streeteasy.com/building/gotham-west [Accessed 9 December 2014].
The Week Staff. “Where America’s jobs went” [Online]. Available from:
http://theweek.com/article/index/213217/where-americas-jobs-went [Accessed 9
December 2014].
Trulia. “Home Prices” [Online]. Trulia. Available from: http://www.trulia.com/home_prices/
Trulia. “1207 N 28th
St” [Online]. Available from:
http://www.trulia.com/homes/Virginia/Richmond/sold/1000690176-1207-N-28th-
St-Richmond-VA-23223 [Accessed 9 December 2014].
United States Department of Housing and Urban Development “LIHTC Database
Access” [Online]. Available from: http://lihtc.huduser.org/ [Accessed 9 December
2014].
Urban Land Institute Terwilliger Center for Housing. “Beckstoffer’s Mill Loft Apartments”
[Online]. Urban Land Institute. Available from: http://uli.org/wp-
content/uploads/ULI-Documents/Beckstoffers_in-layout_FINAL.pdf [Accessed 9
December 2014].
Urban Land Institute. Best Practices: Workforce Housing Development. Washington,
D.C.: Urban Land Institute, 2009, Print.

44
Urban Land Institute Terwilliger Center for Housing. “The Bolton” [Online]. Urban Land
Institute. Available from: http://uli.org/wp-content/uploads/ULI-Documents/The-
Balton_in-layout_FINAL.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Capital Quarter” [Online]. Urban
Land Institute. Available from: http://uli.org/wp-content/uploads/2012/06/Capitol-
Quarter.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Casa del Maestro” [Online]. Urban
Land Institute. Available from: http://uli.org/wp-content/uploads/2012/06/One-
Pager-Casa-del-Maestro.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “The Century Building” [Online].
Urban Land Institute. Available from: http://www.uli.org/wp-content/uploads/ULI-
Documents/Century-Building_in-layout_FINAL.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Columbia Commons/Columbia
Hicks Apartments” [Online]. Urban Land Institute. Available from:
http://uli.org/wp-content/uploads/2011/10/columbia-commons-Columbia-
Hicks.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “The Hayes at Railroad Square”
[Online]. Urban Land Institute. Available from: http://uli.org/wp-
content/uploads/2011/10/Hayes.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Miller’s Court” [Online]. Urban Land
Institute. Available from: http://uli.org/wp-content/uploads/2012/06/Millers-
Court.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Morgan Woods” [Online]. Urban
Land Institute. Available from: http://uli.org/wp-content/uploads/2012/06/Morgan-
Woods.pdf [Accessed 9 December 2014].

45
Urban Land Institute Terwilliger Center for Housing. “Old Town Commons” [Online].
Urban Land Institute. Available from: http://uli.org/wp-content/uploads/ULI-
Documents/OldTownCommons-web1.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “On the Park” [Online]. Urban Land
Institute. Available from: http://uli.org/wp-content/uploads/2011/10/On-the-
Park.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Housing. “Paseo Verde” [Online]. Urban Land
Institute. Available from: http://uli.org/wp-content/uploads/ULI-
Documents/PaseoVerde-web1.pdf [Accessed 9 December 2014].
Urban Land Institute Terwilliger Center for Workforce Housing. “Priced Out: Persistence
of the Workforce Housing Gap in the San Francisco Bay Area” [Online]. Available
from: http://www.rclco.com/pub/doc/special-report-2010-02.pdf [Accessed 9
December 2014].
Urban Land Institute Terwilliger Center for Housing. “Rhode Island Row” [Online]. Urban
Land Institute. Available from: http://uli.org/wp-content/uploads/ULI-
Documents/Rhode-Island-Row_in-layout_FINAL.pdf [Accessed 9 December
2014].
Urban Land Institute. “Tapestry” [Online]. Urban Land Institute. Available from:
http://uli.org/wp-content/uploads/2011/10/tapestry.pdf [Accessed 9 December
2014].
Urban Land Institute. “30 Haven” [Online]. Urban Land Institute. Available from:
http://uli.org/wp-content/uploads/ULI-Documents/30Haven-web1.pdf [Accessed 9
December 2014].
Velsey, Kim. “Gotham West’s Empty ‘Affordable’ Apartments Are Not So Affordable”
[Online]. New York Observer. Available from:
http://observer.com/2014/09/gotham-wests-empty-affordable-apartments-not-are-

46
so-affordable/ [Accessed 9 December 2014].
West 45 Lottery. “Application Cover Letter” [Online]. Available from:
http://www.west45lottery.com/West%2045%20Lottery%20-
%20Application%20Cover%20Letter%20&%20Application.pdf [Accessed 9
December 2014].
Wilson, Rachel. “Workforce Housing in New York City: A Case Study of Urban
American, LLC” [Online]. Cornell Real Estate Review. Available from:
http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1080&context=crer

Masters Research Paper

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (19)

Ähnlich wie Masters Research Paper

Ähnlich wie Masters Research Paper (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Masters Research Paper