Federal Reserve Bank of New York case study finds managers of affordable multifamily housing funds plan to increase new-development allocations to 24%

The Federal Reserve Bank of New York published a case study on private investment vehicles in affordable multifamily rental housing, based on a nonrepresentative survey of 22 investment managers. Respondents planned to allocate 24% of projected capital raised between October 2024 and September 2026 to new development, up from 7% of capital committed to new developments during the prior five years, and expected fundraising to increase to USD 5.2 billion per year from USD 3.7 billion per year. As of September 2024, managers reported 293,735 affordable housing units in their portfolios (median 10,245 per respondent), with 76% income restricted and 24% naturally occurring affordable housing. Across the five-year period ending September 2024, they raised USD 18.4 billion and invested more than USD 18.6 billion in equity, with half of investment dollars going to apartments serving households earning less than 60% of area median income. Banks and pension funds contributed half of total capital commitments, with most remaining commitments coming from high-net-worth individuals, family investment offices, insurance companies, endowments, and foundations; the New York Fed noted the report follows a 2023 case study but the data are not comparable due to different questions and respondents.