(The Return For These Investors Isn’t Money, It’s More Affordable Housing — May 4, 2026)
A growing number of local governments are creating public investment funds that provide below-market financing to developers in exchange for guarantees that a portion of new apartment units will be priced below market rate, offering an alternative to the expiring tax credit model that has long dominated affordable housing finance. Chattanooga’s Invest Chattanooga, seeded with $20 million in city funds, recently closed an $8 million deal for a 170-unit apartment project requiring 30% affordable units, accepting an 8% return rather than the 16% a private equity firm would demand. About two dozen such funds now operate across the United States, with advocates arguing they produce permanently affordable housing that cities won’t have to buy back decades later when tax credit restrictions expire.
Read more: https://www.nytimes.com/2026/05/04/business/economy/affordable-housing-return-on-investment.html
