A Beacon in Workforce Housing

Lighthouse Residential’s role is as an advisor, assisting Housing Authorities acquire existing apartments through the primary use of essential function bonds (EFB). Essential function bonds help solve affordable housing issues while generating millions in income for housing authorities.  PHAs now have an unprecedented opportunity to take advantage of current market timing and utilize essential function bonds to purchase market rate apartments and convert them to affordable and senior housing.  

Higher interest rates have kept investor demand and asset pricing low, providing PHAs with the timing and pricing required to acquire quality properties.  A partnership between Lighthouse Residential and local housing authorities increase the supply of affordable workforce housing, with Lighthouse providing the leadership, expertise, coordination, and financial outlay necessary to acquire affordable properties. 

 Workforce housing plays a critical role in the health and success of communities in a few key ways:

+ Stronger Local Economy: A stable supply of workforce housing attracts and retains essential workers like teachers, firefighters, nurses, and retail employees. This ensures businesses have the staff they need to function, which in turn fuels economic growth and prosperity. 

+ Community Stability: When people can afford to live near where they work, it reduces commutes, lowers traffic congestion, and creates a more stable resident base. This stability fosters a sense of community and allows people to invest their time and energy into the local area. 

+ Diversity and Inclusion: Workforce housing helps ensure a community has a mix of income levels and backgrounds. This diversity brings a wider range of perspectives and experiences, which can benefit businesses, schools, and the overall character of the community. 

+ Reduced Burden on Social Services: When people are struggling to afford housing, they are more likely to experience financial hardship and require social services. Workforce housing helps alleviate this strain and allows social services to focus on those who need the most help. 

In short, workforce housing is an investment in the backbone of a community. It allows essential services to function smoothly, fosters a stable and vibrant local economy, and creates a more inclusive and prosperous place for everyone.

The Problem 

+ The demand/supply imbalance has driven up home prices, pushing out many would-be home buyers.

+ Many prospective home buyers are forced to rent, resulting in lower vacancies, allowing owners to push rents higher.

+ Inflated construction costs and higher interest rates have reduced new units coming on-line.

+ Large investments pools and capital market pricing kept apartment values inflated.

The Solution

+ Tax exempt bonds issued by local housing authorities to acquire private apartments.

+ A public housing authority (PHA) issues essential function bonds (EFB) to acquire and convert market rate housing to workforce housing.

+ The target demographic is individuals earning between 80% and 140% of the AMI.

+ Workforce housing will also include an affordability component, representing ca. 20% of the unit