Despite media reports and expert commentary to the contrary, the federal government is trying to stabilize the nation’s capital markets. Its approach has been to help revitalize what has historically been the locomotive that pulls the economic train here in the United States – real estate.
No doubt, it is doing its part to reform the U.S. housing policy as it relates to home
ownership and investing but this administration is also focusing on another avenue of housing: renting. Rather than push solely the benefits of homeownership—and there are many—this administration is also emphasizing the value of renting. This change is philosophy, and policy, will surely inject much-needed energy into the multifamily housing market. Good news for current owners and even better news for builders and developers of this niche market.
Shaun Donovan, Secretary of Housing and Urban Development (HUD), recently told the National Association of Real Estate Editors, “Fundamentally, we need to have a national housing policy that is not just about home ownership. I am absolutely committed, and have already begun to change and to construct a comprehensive broad housing policy that includes rental housing as a valued, important part of what we support at the federal level. HUD, noted Donovan, is at the forefront of President Obama’s plan to modernize the regulation of capital markets, particularly since the subprime housing crisis led the nation into its steep economic downturn.
HUD has pumped $14 billion into nearly 12,000 communities across the country as part of its recovery program, which includes improving public housing and grants to rebuild communities.
As you may know, investments in multifamily properties typically are the most solid and stable opportunities. And, under the right conditions, they are far less cycle sensitive (boom and bust), and therefore far less volatile, than most other investment opportunities.
With the federal government’s help and HUD leading the way, the multifamily sector could become the first of many rays of light peeking out from the cloudy, dark economic skies that have preceded our nation. Wall Street is important, but without a strong Main Street, where most Americans have their wealth, this recovery will not happen.