CBRE Reports on Investment Opportunities in Affordable Housing
In it’s latest research report, July 2017, CBRE concludes that the opportunities for long term private investments in social and affordable housing are rising across OECD countries.
The report concludes: “It is perfectly possible for the state to procure and provide a ordable housing that is developed and subsequently nanced with private capital. The incentives for private capital can come from tax credits or state subsidy, linked to long-term guarantees, or requirements that the stock be let at below-market rates. No two approaches are exactly the same, since they re ect the existing tax structure and local custom and practice. This is not a hindrance to private sector capital, although it is probably true that those involved in this market have to develop a particular specialism and, at heart, have to be in sympathy with the social objectives of the various programs.
One thing is very clear, the reversion of the a ordable stock to full market rent at the end of a period, or indeed, its sale to private owners, is a powerful incentive for ultra-long- term investors. With the emergence of the global savings glut in recent years, there are many more potential long-term investors than there used to be. Governments in the OECD, faced with the need to provide increased levels of social housing against a backdrop of constrained public nances, could easily work with this long-term capital to meet a social need and open up new investment possibilities.”
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