Preserve affordability while increasing the nation's workforce housing supply

Help stabilize workforce housing communities via beneficial private financing

Sponsor-Dedicated Workforce (SDW) is a creative financing solution that increases the supply of affordable housing available to workforce renters by offering borrowers competitive pricing and underwriting flexibility. It provides incentives for borrowers of conventional properties that establish rent restrictions as part of a private financing approach to address the affordability crisis for the missing-middle renter. Borrowers that create or preserve rents, on a minimum of 20% of the units, affordable to renters earning up to 80% Area Median Income (AMI) or, in certain metros, up to 100-120% AMI can leverage SDW.

Who are workforce renters?

In many cities across the country, it can be difficult for middle-income households to rent housing in the areas in which they work. This is in part due to rent growth outpacing wage growth for decades¹, and a limited supply of housing affordable to these workers who rarely qualify for housing subsidies. Workforce housing is often seen as housing affordable to households earning between 80-120% of AMI, specifically targeting middle-income workers living in a particular geography.

Reversing Rural Trends in the United States

Sponsor-Dedicated Workforce financing is a critical tool for expanding affordable housing options for workforce renters in rural America. This importance is underscored by several trends in rural housing:

• Rising rents outpace income growth: Between 2000 and 2023, real rents in rural areas rose by 31.2%, while median real income for rural renters increased by only 5.5%, creating a significant affordability gap.
  Source: U.S. Department of Housing and Urban Development, Rural Housing Trends Report, 2023
   
• Cost burdens are widespread among rural renters. As of 2023, 47% of rural renter households were cost burdened, spending more than 30% of their income on housing. Nearly half of these households faced severe burdens, spending over 50% of their income on rent.
  Source: Joint Center for Housing Studies of Harvard University, The State of the Nation’s Housing 2023
   
• Growing strain on Middle-income rural renters. Even rural households earning between $45,000 and $74,999, the cost burden rate exceeded 40%, reflecting a growing strain on traditionally stable income groups.
  Source: National Low Income Housing Coalition, Rural Rental Housing Affordability Report, 2023
   
• Housing supply shortages and aging stock challenges. Many rural communities lack sufficient rental options, with a significant portion of the housing stock built before 1960. Manufactured homes and single-family rentals dominate the rural rental landscape, but affordability remains an issue.
  Source: U.S. Census Bureau, American Housing Survey, 2023
   
• Homeownership is slipping out of reach for rural families. Real house prices in rural areas have risen by 75.5% since 2000, while incomes have lagged. This has led to a decline in homeownership rates among working-age rural Americans.
  Source: Federal Reserve Bank of St. Louis, Rural Housing Market Analysis, 2023