This article is featured in the 2024 FCLTGlobal Blue Book, a collection of real-world examples of how our members are putting long-term strategies into practice today. We hope that these practical illustrations will inspire others to embrace the mission of focusing capital on the long term. Learn more >>

The preservation of affordable housing is paramount to protecting underserved populations and maintaining the supply of below-market rental units in high-growth areas. For more than a decade, Nuveen has helped tackle this challenge, investing in preserving the supply of safe, quality, low-cost housing. As of 3Q23, Nuveen has a platform that manages over 161 affordable housing assets, with approximately 32,000 units across 24 states. Given the greatest household expenditures are housing related, Nuveen’s underlying mission in this space is to provide residents with affordable rent and targeted supportive services. By lessening the impact of those severely rent burden, residents then have an opportunity to spend their income towards other essential items, including improving health outcomes, and increasing educational advancement, and financial security. 

The cost-burden on lower-income renters has become increasingly untenable and lower-income earners in the bottom quintiles of the U.S. population is only growing. Nearly half of extremely low-income renter households are senior citizens and citizens living with diverse abilities. One-third of extremely low-income renter households are in the labor force – 85 percent of whom work more than 40 hours each week 1

A Strategy to Protect and Build Affordable Housing for Low-Income Communities 

We estimate there are approximately 650,000 units at risk of losing their affordability protections by 2030 unless there is active intervention 2. In 2022, Nuveen Real Estate launched the Global Impact Investing Sector. Drawing upon more than a decade of investment experience in the space, the U.S. Impact Housing Strategy focuses on building resilience among low-income communities in the U.S., primarily by investing in rent-subsidized, income-restricted, and Naturally Occurring Affordable Housing (NOAH) assets. The strategy concentrates on preserving existing affordable housing stock and developing new units in designated communities. More than 95 percent of our portfolio serves renters who earn 60 percent or less of the Area Median Income (AMI).  

In addition to quality housing, Nuveen is committed to providing social services that can positively affect our residents’ lives and build strong, healthy communities. Many communities facing the adverse effects of the nationwide affordable housing shortage today are also victims of generational disinvestment in key quality of life resources. Our strategy helps address that disinvestment by building a larger and more sustainable ecosystems for communities to thrive. 

Bridging Public and Private Sectors 

Addressing the affordable housing crisis will require both scale and partnerships. Our strategy includes building relationships that create an important bridge between private capital and public resources. The traditional model for housing must be reimagined so that municipalities, governments, and private capital can collaborate on this issue – achieving more together than any group could independently. For Nuveen, that partnership approach has driven success and growth. It has yielded many off-market opportunities and allowed us to deliver significant volume of units for communities in need. Investment and partnership at this level benefits residents, investors, and communities as a whole. 

Solutions and Opportunities for Communities in Need  

Nuveen’s analysis of the U.S. Census American Housing Survey found that lower income renters have a higher share of households living in physically inadequate housing conditions. Moreover, according to a National Low Income Housing Coalition analysis, 11 million extremely low-income renter households occupy or have access to only 3.7 million affordable and available units, leaving a shortage of 7.3 million rental homes 3. 

Responsible institutional investors of affordable housing are providing residents with a safe and sustainable living experience. The numerous benefits from institutional investment entering the affordable housing sector include, but are not limited to: 

In 2023, Nuveen’s parent company, TIAA, committed to seed the Nuveen Real Estate U.S. Impact Housing fund with $250 million through the TIAA General Account. The fund is focused on generating strong risk adjusted returns, primarily by investing in a geographically diverse portfolio of properties, including assets that are rent-subsidized, income-restricted, and/or Naturally Occurring Affordable Housing (NOAH). The fund also intends to invest in regenerative development and financing that supports diverse developers of affordable housing. This creates a compelling portfolio allocation for institutional investors, as demand for affordable housing has intensified nationwide and more investors are seeking opportunities that produce positive societal benefits and steady returns. 

We view investments in housing through an impact lens, with an intentional focus on upward mobility and financial inclusion. When working in specific communities, we think about solutions holistically – not just as assets, but as bridges to better healthcare, education, transportation, and business development. We are proud of the results we have helped to deliver, but the job is far from done and we look forward to making more progress on this issue in the years ahead. 

  1. The GAP Report 2023; ACS PUMS 2021

  2. The State of the Nation’s Housing 2019; Joint Center for Studies, Harvard University

  3. The GAP Report 2023; ACS PUMS 2021

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