Population explosion and urbanization are pressurizing cities and adding to the woes of the existing residents. The shortage of living space adversely affects the quality of life, and also creates more administrative complexities.
According to the National Apartment Association, the U.S. alone will require about 4.6 million new multi-family units by 2030. That works out to about 328,000 new units annually over the next 10 years.1
As more people scramble for the right kind of accommodation, both developers and authorities are doing their best to create more and more living spaces. In today’s competitive construction landscape, developers are being forced to continually innovate in an attempt to keep up with the demand. Since it is not possible to add unlimited structures horizontally, the only option is to build vertically! More stories can accommodate more families, although building upwards also has its limitations and restrictions.
The concept of multi-family housing has come of age! It’s not only a blessing in disguise for the residents but also a lucrative business opportunity for developers who are always on the lookout for their next project space and investment opportunity.
What is Multi-family Housing?
Any residential building that houses multiple families qualifies as a multi-family housing structure. Although apartments and condos are the most common, duplexes and townhouses also fit the bill. Sometimes, a large complex has multiple buildings (under single management) with several multi-family housing units.
Something for Everyone
An independent house usually accommodates one or more families, but the developer sells
the property only to one owner as a single unit. In the case of a multi-family housing structure, multiple homeowners buy or lease independent residential units. This gives the developer a chance to rake in more returns from the limited space at the ground level.
Owning an independent home in a city could be an elusive dream for those with a small budget.
Thanks to multi-family housing complexes, unit owners get to own a piece of prime real estate in the heart of the city. Even if an apartment owner does not own land and common areas at the ground level, he owns the space inside the home. This is what makes the concept of a condo unique. Also, the owner gets to enjoy the benefit of shared amenities, including an increased level of security thanks to the option for community living.
Multi-family housing units are also mushrooming in rural areas, thanks to the space constraint in the metros. The government is also offering all the necessary support in the form of programs and financial support for the developers making multi-family housing programs a huge draw for anyone willing to invest.
What is Multi-family Housing Program (MHP)?
Developed under the administration of the Department of Housing and Community Development, the multi-family housing program (MHP) provides a set of rules and features that apply to different types of residential units. An initiative based on the existing California Housing Rehabilitation Program, the MHP assists new construction, rehabilitation, and preservation of permanent and transitional rental housing for lower-income groups, elders, and people with special needs.
The scope of MHP also includes the conversion of non-residential structures into rental housing for lower-income groups. The program funding even covers post-construction facilities like child care, after-school care, relevant social service, property acquisition, refinancing, site improvements, and reasonable consulting fees.
Eligible Business Entities
Local public entities, limited-equity housing cooperatives, and limited partnerships are some of the entities eligible to develop a project under MHP. The eligible entity must have developed at least one affordable housing project to be eligible to participate in the MHP program.
Financing Options for Developers
Any interested individual can take full advantage of the multi-family housing program. Upon joining the program, the individual gets to enjoy multiple benefits like deferred payment loans with a 55-year term, and 3% simple interest on the unpaid principal with some exceptions. Furnished below are some of the different types of grants and loans available to interested individuals and groups.
Farm Labor Direct Loans & Grants: It provides affordable financing to develop housing for year-round and migrant or seasonal domestic farm laborers.
Housing Preservation & Revitalization Demonstration Loans & Grants: It restructures loans for existing Rural Rental Housing and Off-Farm Labor Housing projects for improving and preserving the availability of safe and affordable rental housing for low-income groups.
Housing Preservation Grants: It provides grants to sponsoring organizations for the repair or rehabilitation of housing owned or occupied by low and very-low-income rural citizens.
Multi-Family Housing Direct Loans: This program provides competitive financing for affordable multi-family rental housing for low-income, elderly, or disabled individuals and families in eligible rural areas.
Multi-Family Housing Loan Guarantees: The program works with qualified private-sector lenders to provide financing to qualified borrowers to increase the supply of affordable rental housing for low and moderate-income individuals and families in eligible rural areas and towns.
Multi-Family Housing Rental Assistance: This program provides payments to owners of USDA-financed Rural Rental Housing or Farm Labor Housing projects on behalf of low-income tenants unable to pay their full rent.
All applications for availing funding are invited through the issuance of Notices of Funding Availability (NOFAs). The same shall specify, among other things, the amount of available funds, application requirements, allocation of rating points, minimum eligibility threshold point scores, application submission deadline, schedule for rating and ranking applications and awarding funds, and the general terms and conditions.
Also, the department has outlined certain project requirements. The authorities are empowered to review the project plans and specifications to ensure that the following objectives are met:
Operating costs shall be minimized during the useful life of the Rental Housing Development.
Tenant security shall be enhanced through features such as those designed to prevent or discourage unauthorized access and to allow for ready monitoring of public areas.
Unit sizes, amenities, and general design features shall not exceed the standard for new developments rented at or below the market rent in the area of the project.
How Design Everest Can Help
Right from conceptualization to the completion of the project, a developer of a multi-family housing structure/complex requires the support of a multi-functional team of experts. Whether it is for the construction of a new structure or the expansion of an existing one, Design Everest can show the way with a suite of multi-family project engineering services.
Call us at (877) 704-5727 for a no-obligation quote followed by a consultation. We can also connect you with a professional engineer or designer right away for a virtual consultation or virtual on-site!
*Note: The content published above was made in collaboration with members of Design Everest.
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