Financing Multifamily Rental Housing
In the first years of the twenty-first century, easy access to credit fueled increasing real estate values that were ultimately unsustainable. When the bubble burst, values plummeted, billions of dollars were lost, and many banks were forced to close. Subsequent government interventions and regulatory/legislative reforms were primarily targeted at stabilizing the American financial system and strengthening the core finances of banks.
While real estate lending dropped precipitously following the crash, a gradual market recovery in recent years has supported increased lending activity, particularly for single family homes and large multifamily buildings. But smaller multifamily buildings, which traditionally had credit provided by locally based portfolio lenders, still suffer from a lack of available credit, especially in low and moderate income communities.
Why does credit for multifamily rental housing continue to be severely constrained in low and moderate income communities? Is it because of new regulations or legislation, a lack of borrower demand, or banks’ own risk analysis? What can be done to restore ready access to credit for this segment that is so important to the preservation of affordable rental housing and the health of low and moderate income communities?
Erika Poethig, Urban Institute (Moderator)
Pamela Daniels-Halisi, The PrivateBank
Geoff Smith, Institute for Housing Studies at DePaul University
Mark Willis, Furman Center for Real Estate and Urban Policy, New York University
Barry Zigas, Bipartisan Policy Center Housing Commission