Local investors outpace builders in affordable home output

There is a pressing need for affordable housing, compounded by a significant number of vacant homes. A new class of corporate refugees is entering the housing market, rehabilitating these vacant homes and creating new income opportunities outside of traditional corporate environments. Institutional investor activity has dramatically decreased, emphasizing the importance of small-scale investors who typically operate locally. Despite their contributions, these investors lack incentives, prompting calls for legislative changes such as the Neighborhood Homes Investment Act aimed at supporting affordable housing development through federal tax credits.

There's a huge need for affordable housing, and the builders can't supply it, but we have 15 million vacant homes. Institutional investors accounted for only 1.93% of all home purchases in Q1 2025 and just 6.6% of investor purchases, down 62% from their 2021 peak. About 78% plan to purchase just one to five properties in the next year. Carlton argued that policymakers don't yet grasp the role these small investors play.

The Neighborhood Homes Investment Act would create a federal tax credit to build and rehabilitate affordable homes for urban, suburban, rural and tribal communities.

Read at www.housingwire.com