Affordable rental housing doubles in opportunity zones

by Candyd Mendoza09 May 2019

Freddie Mac multifamily loans in “economically distressed” areas have increased rapidly since 2010, according to data from Freddie Mac’s latest report.

In the report, Freddie Mac analyzed previous loans that financed multifamily loans in economically distressed areas, which are now designated opportunity zones.

The analysis showed that affordable rental housing for very low-income households is more than twice as typical in opportunity zones, where median incomes are lower and poverty rates are higher than the national average.

“The research shows that Freddie Mac financing for affordable housing in economically distressed areas predated the creation of opportunity zones,” said Steve Guggenmos, vice president of research and modeling for Freddie Mac Multifamily. “Our financing in these areas has far outpaced our work elsewhere, consistent with our mission to seek out the areas most in need of affordable housing. The ultimate impact of additional and tax-advantaged investments remains to be seen.”

Freddie Mac said that 70 of the 105 opportunity funds identified by the National Council of State Housing Agencies (NCSHA) have investment focus of multifamily residential development, with estimated funds between $14.9 billion to $15.2 billion.

“The census tracts that governors identified as being economically distressed and in need of capital infusion overlap quite well with areas that Freddie Mac targets for affordable housing assistance,” Freddie Mac wrote in the report. “Our mission is to promote housing affordability for families who struggle with high rental cost burden and our historical financing activity in these areas showcases our commitment to this goal.”