If you have tried to buy or rent a house in the last year – especially in a major city in the US, then you know that there is a shortage of housing that is making competition fierce. This is causing a rift in the market where first time buyers or those looking for affordable housing are having a hard time breaking into ownership, because anyone selling in a desirable neighborhood knows they can set the price at the top of its value.
For this reason, experts are calling the “real unicorn” of today’s economy single-family homes that buyers can actually afford. Developers are set up to make a lot of money in this space, if they can figure out the formula to do it efficiently. The problem is, the developer will need to take into consideration price, land costs, location, and amenities, making this a tough nut to crack. But, it is undeniable that the demand for affordable housing in any urban market is only getting greater.
What will this housing look like? That is another piece of the puzzle that developers will have to get right in order to get the most gain. It could revert to the days of row houses with an updated feel, or there could be more of a demand for transit-oriented developments that make commuting a breeze. There are challenges to urban development, no matter how much it is needed. Many developers run into problems with current community members, many of whom are concerned about growth, density, construction, and preserving the character of their community. And, in cities that need voter approval, this can become a major obstacle.
Regardless of challenges present, a developer who can figure out how to add affordable housing that is attractive to consumers in urban areas stands to gain a lot of money. The housing shortage is not going to get easier, especially since more and more cities are acting as funnels for motivated young professionals, so they demand is only growing for whoever wants to rise up and meet it.