Link Apartments® Essential Housing

We’re in the midst of a housing crisis—perhaps one of the latest in American history. It comes from a severe shortage in moderately priced rental housing combined with an era of increased demand, higher building costs, and continuing supply chain issues.

Providing essential housing in urban areas such as Charlotte, where demand is highest among young professionals and families, is a sensible commitment to the city’s future. That’s why Grubb Properties is taking the lead in helping provide housing for those looking for good neighborhoods and strong communities to live and work in.

Defining Essential Housing

We view essential housing as a solution that offers working professionals reasonable, quality housing in urban markets. Generally, this covers those who earn between 60 and 140% of the area’s median income.

Essential housing does not include workforce housing for middle-income working families renting in suburban areas, nor the kind of high-cost housing currently saturating many urban markets.

Recently, however, demand has exceeded availability. A significant factor of this stems from the cost challenges in building new housing. Contributing to the rise in costs are such factors as increased construction costs, higher land costs, and lingering effects of the COVID-19 pandemic.

As a result, those looking for homes who earn too much for subsidized housing but not enough to afford high-cost housing are finding themselves at a loss. This population, nonetheless, needs quality housing they can afford in neighborhoods that work for them.

Solving the Essential Housing Problem

In developing Link Apartments^®, Grubb Properties offers a solution to the housing gap that satisfies investors, potential residents, and our broader community. We select urban locations near popular and practical community amenities, transit options, and employment anchors such as hospitals, medical centers, research universities, and technical parks. This is along with offering rents inexpensive to residents earning 60-140% of the area’s median income.

With a housing shortage being a severe issue in Charlotte—primarily due to a lack of parking—solving that dilemma requires developers to take a creative approach. For example, our multifamily project will have 104 apartments, with half designated affordable for households earning 80 percent of the area median income, but only have six available parking spaces. Yet the project sits on a greenway connecting to downtown Charlotte, and the apartment community will feature a state-of-the-art cycle center. In addition, it’s within quick and easy reach of public transit options, and we’re working to improve overall accessibility.

Because of the reduced parking, we can achieve that essential housing without any public subsidy. To include more parking could cost up to $30,000 per space to build. On top of that, money saved in not owning a car can be applied to other priorities. Residents can do this because our community enables them to achieve a car-free lifestyle.

As a bit of proof supporting Grubb Properties’ approach to essential housing, their multifamily communities held high occupancy throughout the pandemic with fewer issues with collections than other renters in the community. In addition, by focusing more on the customer, our Link Apartments^® provide a full resident experience with proven investor returns.

How Grubb Properties Makes It Work

Grubb Properties development program heavily focuses on delivering Link Apartments^® communities to desirable urban markets where essential housing is in most demand.

We understand the individual or family looking for essential housing and what matters most to them. Therefore, we encourage tenants to build authentic communities at Link Apartments^® and take advantage of our Long-Term Resident Program, which caps rents for any resident who stays at least five years. More than 8% of our residents are currently part of this program.

We are always looking for new, creative approaches in housing and community-building that will allow us to deliver essential housing in the areas that need it most. Find a community near you and link to what you love!

Building Sustainable Communities

As a result of the various challenges associated with the COVID-19 pandemic, the US is currently dealing with one of the biggest housing crises in living memory. Much of the problem stems from a shortage in moderately priced rental housing in the face of rising demand, building costs, and supply chain issues.

That said, providing essential housing in urban areas is a sensible and morally right mission.

Defining Essential Housing

While definitions may vary slightly among some groups, at the very least, essential housing should be that which offers working professionals affordable, quality housing in urban markets. Financially, this would encompass those who earn more than the cutoff for public housing subsidies but less than 140% of the area’s median income.

Essential housing does not include workforce housing which usually refers to middle-income working families who rent in more suburban areas. Similarly, essential housing does not include luxury housing which is currently saturating the market in most cities.

A key factor driving the essential housing shortage lies in the number of younger people entering the workforce and knowing that more are on their way.

Currently, the US housing market is 3.8 million homes short of what is needed to meet demand.

One of the most significant factors affecting market availability comes from the cost challenges in building new housing. Contributing to the rise in costs are:
– Increased Construction Costs – Over the past ten years, the average costs associated with construction have outpaced average wage growth by 25%.
– Increased Land Costs – With the value of land used for single-family housing rising four times faster than inflation and the price of land under existing single-family homes going up over 25%, the cost of land for new structures has also increased.
– Effects of the Pandemic – The COVID-19 pandemic has had several long-reaching effects on housing and construction. Most noticeable are issues around rising costs of materials from lumber to fixtures. One reason for the increased cost has been supply chain disruptions which have affected all markets and industries.

Addressing the Essential Housing Problem

At Grubb Properties, we believe we’ve found a solution to the housing gap that serves all stakeholders: investors, potential residents, and our broader community. In developing Link Apartments^®, we focus on two key differentiators: location and price point. We select urban areas near community amenities, transit options, and employment anchors like research universities and medical centers. We also target affordable rents to residents earning 60-140% of the area’s median income.

How Grubb Properties Makes It Work

Given the severe nature of the current housing gap, Grubb Properties has organized our vertically integrated company completely around meeting this need. Our development program is solely focused on bringing Link Apartments^® communities to desirable urban markets where essential housing is in the highest demand.

We understand the resident who needs and wants essential housing, and what matters most to them. We encourage residents to stay at our properties and build authentic communities. Our Long-Term Resident Program caps rents for any resident who has lived at our properties for at least five years. More than 8% of our residents are currently part of this program.

The growing need for essential housing, combined with Grubb Properties’ years of experience in actualizing these creative methods, has us perfectly positioned as we come out of the current health and housing crises. There is no company better organized or better prepared to meet this critical moment.

***

For more information, visit our Grubb Properties website at www.grubbproperties.com to see how our investment perspective starts with principle.