More Big CRE Players Invest in Affordable Housing Development

The U.S. is suffering from a severe shortage of at least 4.5 million homes, according to the U.S. Chamber of Commerce — although other reports suggest the number is closer to 7 million — and this deficit, which includes homes designated as affordable, has for decades burdened the economy, never mind Americans’ personal income. 

In states such as California, Texas, Florida and New York, the GDP loss due to a lack of housing between 2008 and 2025 was more than $20 billion, the Chamber of Commerce found. 

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The housing shortage on the affordable end has become so acute that some of the biggest names in commercial real estate — including names on this Power 100 list — have made developing affordable housing a key part of their investment strategies. 

Slate Property Group is one firm that has been working hard to help alleviate the housing crisis, as the majority of the 17,000 housing units in its portfolio have been designated as affordable. Slate co-founder David Schwartz told Commercial Observer in April that the company prides itself on its outside-the-box approach. 

“We’re going to bring up ideas like converting the first hotel in New York state history to 100 percent affordable,” Schwartz said of an old Hilton near JFK Airport. “That’s a building that’s going to be opened in 18 months — half the time that it would take to build from the ground up.” 

Additionally, LMXD, led by Lisa Gomez and David Dishy, has about $20 billion worth of affordable housing projects currently in development, with 57,000 units either completed or in progress.  

Camber Property Group, led by founder Rick Gropper, spent nearly $1 billion with its financing partners this January to buy an 11-building, 1,527-unit apartment complex in Brooklyn. The company is now putting hundreds of millions of dollars into repairs at the complex. 

“Affordable housing, supportive housing, preservation of existing buildings and the new construction of transitional housing is really our area of focus — affordable housing and trying to make a dent in the housing crisis here in New York and across the country,” Gropper said. 

And Alicia Glen, a former New York City deputy mayor who founded and now leads MSquared, believes if a company is in a position to make a dent in this issue, it should. Toward the end of last year MSquared, alongside a team of investors, acquired 3333 Broadway — Manhattan’s biggest residential building — for $324 million with the goal of turning it into a truly 50-50 income building, where half of the units will be affordable or reserved for low-income families. 

“We did that because I thought it was really important that capital like ours acquire buildings like this,” Glen said, “so that we can continue to improve them and to maintain this income mix — which is this very precious commodity — and be able to demonstrate that this works, and then investors can make money.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.