During a session on financing, panelists concurred that capital may be easing for development—specifically multifamily rental—that includes housing for moderate-income workers. Manny Menendez, vice president of multifamily lender strategy and relationships for Fannie Mae, pointed to a significant increase in Fannie Mae’s multifamily debt purchases during the second half of 2010. “We are bullish on the market for multifamily, and we are seeing a return of other capital providers,” he said.
The combination of Gen Y entering the workforce and the recession causing many former home owners to become renters bodes well for the workforce rental market, Menendez said. “The focus [on housing] has shifted to one where rentals will play a key role going forward.” Despite the uncertainty regarding the future role of Fannie Mae and Freddie Mac in mortgage finance, Fannie Mae is taking a “business as usual” approach to multifamily lending, he noted. “We will continue to provide leadership in this sector of the market .”
Added panelist Orlando Cabrera, chief executive officer of National CORE, “There is no way that the private market can absorb the market space [occupied by Fannie and Freddie] in terms of multifamily debt.”
While rental housing offers promise as a way to help fulfill the need for workforce housing, the overhang of foreclosed homes will continue to stymie a rally for the housing industry as a whole, said panelist and ULI Terwilliger Center founder J. Ronald Terwilliger, chairman emeritus of Trammell Crow Residential. “We have got to get through the foreclosure crisis before any sense of normalcy is realized.”