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Build the Mountain West

Build the Mountain West: Private Credit Real Estate Funds as a Solution


Nestled amidst the rugged grandeur of the Rocky Mountains, the Mountain West region of the United States has long captivated the imagination with its breathtaking landscapes and outdoor allure. Yet, beneath the surface of this natural splendor lies a challenge that demands our immediate attention: a chronic scarcity of housing that has persisted for years. In this article, we delve into the compelling need for housing development in the Mountain West, supported by irrefutable statistics. Furthermore, we explore innovative solutions, such as private investors investing with private credit real estate funds, to address this pressing issue.


The Housing Crisis in the Mountain West


The Mountain West region of the United States is renowned for its stunning natural beauty, outdoor recreational opportunities, and quality of life. From the snow-capped peaks of the Rockies to the vast expanses of desert, this region offers a unique blend of picturesque landscapes and vibrant communities. However, beneath this beauty lies a pressing issue: a chronic shortage of housing that has persisted for years. In this article, we will explore the need for housing development in the Mountain West, backed by compelling statistics.


The Urgent Need for Housing Development in the Mountain West


The Mountain West has long been an attractive destination for people seeking a high quality of life. This desirability has resulted in a significant influx of new residents over the past decade. However, this population growth has not been met with an adequate supply of housing, leading to a severe housing crisis.


1. Population Growth: According to the U.S. Census Bureau, the population of the Mountain West region has grown by over 10% in the last decade. This substantial increase in residents has put immense pressure on the existing housing stock, leading to skyrocketing home prices and rents.


2. Housing Shortages: Data from the National Association of Realtors (NAR) indicates that the Mountain West has consistently faced a shortage of affordable homes. In 2020, the region had the lowest inventory of available homes for sale, with just 1.8 months' supply, well below the national average of 3.3 months.


3. Rising Home Prices: Reports indicate that home prices in Mountain West states like Colorado, Utah, and Idaho have seen double-digit annual growth in recent years. This increase in prices has made homeownership increasingly unattainable for many residents.


4. Increased Homelessness: The shortage of affordable housing has contributed to a rising homelessness crisis in the Mountain West. According to the U.S. Department of Housing and Urban Development, the number of homeless individuals in the region has increased steadily over the last decade.


5. Overcrowding: As a consequence of the housing shortage, many families are forced to live in overcrowded conditions, which negatively impacts their quality of life and well-being. This is reflected in statistics from the U.S. Census Bureau, which show that overcrowding rates in the region are higher than the national average.


Addressing the Housing Crisis with Private Credit Real Estate Funds


The housing crisis in the Mountain West is undeniably multifaceted and requires creative solutions to bridge the funding gap, especially as traditional lending institutions have become increasingly cautious. As we seek solutions, one compelling avenue emerges: private investors should consider investing with private credit real estate funds, which can play a pivotal role in providing developers with the necessary capital to continue building despite banks scaling back on lending.


1. Investing with Private Credit Real Estate Funds: Private credit real estate funds are investment vehicles that pool capital from various sources, including institutional investors and high-net-worth individuals, to provide financing solutions for real estate projects. Private investors looking to make a meaningful impact while seeking attractive returns can explore this avenue as part of the solution.


2. Access to Flexible Capital: Unlike conventional banks, which often adhere to strict lending criteria, private credit real estate funds offer more flexibility in structuring financing deals. By investing in these funds, private investors can participate in the provision of flexible capital to developers, enabling tailored solutions for various real estate projects.


3. Timely Capital Deployment: Private credit real estate funds are known for their ability to swiftly deploy capital, helping developers seize opportunities and maintain project momentum. Private investors can contribute to the timely deployment of capital, thereby playing a role in supporting the region's development needs.


4. Mitigating Risk: In an unpredictable economic landscape, private credit real estate funds often have risk mitigation strategies in place. By investing in these funds, private investors can indirectly participate in risk-mitigation efforts, contributing to the stability and success of real estate projects.


5. Expanding Affordable Housing Initiatives: Private credit real estate funds are increasingly interested in funding affordable housing projects, recognizing the pressing need in regions like the Mountain West. Private investors who align with this cause can consider investing in such funds, thereby promoting the expansion of affordable housing options.


Private Investment for Public Good


The housing crisis in the Mountain West requires an array of solutions, and private investors have a significant role to play. By investing with private credit real estate funds, private investors can not only seek attractive returns but also contribute to addressing the region's housing challenges. This collaborative approach between private investors and real estate funds offers a promising way forward, fostering sustainable growth and prosperity for the Mountain West's communities.


Sources:


1. United States Census Bureau (2022, July 1). QuickFacts United States. Census.gov. Retrieved September 18, 2023, from https://www.census.gov/quickfacts/fact/table/US/PST045221

2. N National Association of REALTORS® (2022, July 1). Housing Shortage Tractor. Nar.Realtor. Retrieved September 18, 2023, from https://www.nar.realtor/research-and-statistics/housing-statistics/housing-shortage-tracker

3.  (2023). Payson Utah at Sunset [Photograph]. Trulia.com. https://www.trulia.com/home/5640-W-8800-S-Payson-UT-84651-2056414937?mid=1#lil-mediaTab


Danny Swett September 18, 2023
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