Potential Benefits of Investing in Workforce Housing during a Recession

• Workforce housing is Class B and C product targeting renters earning 60% to 120% of the area median income.
• Investing in workforce housing can be a defensive play in a downturn due to low vacancy rates, short supply and high demand for workforce housing, and possible continued rent increases.
• While IRRs may be lower, cash flow from workforce housing investments may still be strong during a downturn.
• Risks of investing in workforce housing include the inability of renters to absorb rent increases, decline of new household formations reducing demand, and government intervention in the housing market via rent control policies.
• Despite these risks, institutional capital continues to flow into workforce housing investments