Adobe Stock/Ivan Kurmyshov

As the need for housing increases nationwide, developers and financiers are finding opportunity in the demand. Even driving record deals that will be critical additions to markets that are struggling the most and pushing the workforce farther and farther away.

In the midst of California’s affordability crisis and housing shortage, workforce housing is becoming one of the most in-demand product types for investment. LaTerra Development recently completed construction on a new construction workforce housing project and sold it ahead of schedule for a market-record price of $33 million or $340,000 per unit. Providence Capital purchased the 97-unit property, which is located in Chula Vista. The sale illustrates the strong market demand.

“We are very bullish on the Chula Vista submarket, so we were expecting strong pricing. This was higher than our expectations, but we were not surprised. We knew that we would do well on this asset,” Chris Tourtellotte, managing director of acquisitions and capital markets at LaTerra Development, tells GlobeSt.com. “It is in a great submarket, and it is a good class-A product with nice amenities. Workforce housing is also becoming a favored asset class right now.”

The housing crisis is certainly a factor in driving the demand, both for investors and renters. “There is a housing crisis in California, and people need a place to live. 80% of apartment product built this cycle has been luxury housing,” explains Tourtellotte. “To the extent that you can offer a class-A product without sky-high luxury prices, you are going to have strong demand, which is what we are seeing here.”

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