Freddie Mac calls for $100 billion in annual multifamily investment
The head of Freddie Mac's multifamily division projects that the asset class needs $1 trillion in capital over the next decade. That is $100 billion every year earmarked to build 10 million additional apartment units over the next 10 years. David Brickman, senior vice president of the government-sponsored enterprise's multifamily division, said financially stressed households will be forced into rental markets, only to compete with new households who are unwilling to buy. "In fact, the decline in the homeownership rate has been sharpest for those household heads under 30 years of age," writes Brickman in a Freddie Mac blog post. "For every 1% that the current homeownership level of 66% decreases, 1 million individuals become renters." The economic uncertainty pushed 1.4 million families into rentals between the middle of 2010 through mid-2011. In the last two years, Brickman said few new apartment buildings were built. Further, the median age of standing apartment buildings is around 40 years. New construction on large high-density housing would help stimulate community finances, he added. "This is good news for America because rental housing makes economic contributions to the community by creating jobs and providing residents that can support local businesses," Brickman said. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.