In the world of multifamily real estate, terms like workforce housing and naturally occurring affordable housing (NOAH) are increasingly talked about, especially as housing affordability becomes a bigger issue in U.S. cities. These concepts tackle the housing needs of middle-income workers and others not eligible for subsidized housing, offering solutions that balance economic viability with social considerations.
Workforce Housing: A Definition
Workforce housing is essentially apartments that are affordable for middle-income workers—those who might earn too much for a lot of government housing help but not enough for market-rate homes in pricey areas. This includes professions like teachers, retail workers, logistics staff, and others who are vital to community services.
- Affordability: Rent payments are typically around 30% of a household’s income, pegged to local median income levels, ensuring housing doesn’t take up too much of a person’s earnings.
- Location: These apartments are often near job hubs to cut down on travel time and costs.
Naturally Occurring Affordable Housing (NOAH)
NOAH is a category of existing housing that’s become affordable due to market conditions rather than deliberate planning. It’s usually older, less amenity-rich buildings that haven’t seen much investment.
- Market-Driven: NOAH comes about not from policy or subsidies but from market dynamics where property values remain low due to factors like location, lack of investor interest, or absence of major economic boosts.
- Vulnerability: These units are at risk of being redeveloped into more expensive options, potentially displacing residents.
- Diversity of Construction: NOAH can include everything from single-family homes to apartment blocks, predominantly in urban settings where older buildings remain.
Conclusion
Workforce housing and NOAH play important roles in making it possible for essential workers and middle-income families to live in the areas they contribute to. At Plowshares Capital, we focus on acquiring properties that serve both as workforce housing and NOAH. Our acquisition strategy is driven by our mission to foster community through property management. We believe that well-considered purchases will not only deliver strong financial returns but also allow us to create meaningful community bonds. We ensure our properties are well-maintained and upgraded without pushing rents beyond what’s affordable, thereby helping to preserve naturally occurring affordable housing.
