Finding Success in the Development of Workforce Housing with Scott Choppin – Ep. 45

It’s no wonder that most successful startups are created by individuals reaching what we would call middle-aged. According to Entreprenuer.com, “Based on employment growth and fastest sales growth in the first five years of operation, data on the top 0.1% of startups reveals that the founders of these firms started their companies, on average, when they were 45 years old.” These people have the skills, network, and track record needed to show potential investors that they can be trusted to perform. It may not be such a bad idea to stick around in the corporate world for a little longer after all! 

There are many traits that make Workforce Housing desirable for development.

Workforce housing often comes with a negative connotation. However, the type of development that we are discussing in this podcast is geared at working-class, blue-collar workers that need an affordable place to live. As mentioned in the episode, there is very little emphasis being put on the housing needs of these people currently. This is a deeply undersupplied sector of housing that needs to be addressed. As mentioned, true “affordable housing” is government subsidized housing whereas “workforce housing” is more for those that are over-qualiified for these government subsidized housing but may not be able to afford the Class A products that are often being constructed during this market cycle.

Scott is making these projects economically viable and successful in the way that he structures these deals. He believes that this model is truly “Recession Resilient” due to the following reasons; the tenants are typically gainfully employed, they contain strong family units that share expenses across the various members of the family, and the market is heavily undersupplied for these type of residents.

To break it down a little further, the tenants that often occupy these UTH (Urban Townhome) units are gainfully employed with often more than one income-earner in each household. They often comprise of very strong family units with extended family living in the units as well. This allows them to share expenses across the various members of the household to reduce the cost burden. Also, as mentioned, this type of development addresses the issue of “missing middle housing” that is so commonly discussed in development circles around the U.S. This is something that Scott believes heavily in and seems to provide an economic and societal return to both Scott and the tenants that occupy his developments.