Workforce Housing — Why Middle America Is Our Biggest Opportunity

Most people, when they hear real estate, picture one of two things: either a luxury apartment building with a rooftop pool, or a distressed property in a neighborhood nobody wants to be in. And the assumption is that serious real estate investing means one or the other. What most people miss is the middle. And the middle is where the biggest, most durable opportunity in residential real estate actually lives. Workforce housing. It's where we have invested for nearly 2 decades, and I want to explain why, because I think once you understand it, the logic is hard to argue with. Workforce housing goes by a few different names: multifamily housing, Class B and C apartments, middle market rentals. But what it really means is housing for the working backbone of America. Teachers, nurses, construction workers, office administrators, people who earn solid, stable income, often somewhere between $40,000 and $80,000 a year, but not enough to comfortably afford a luxury apartment and too much to qualify for subsidized housing. These are not people on the margins of the economy. They are the economy, and they need a place to live. That's the beginning and end of the demand story. And here's the current picture. The United States is significantly undersupplied rental housing. CBRE is one of the largest commercial real estate firms in the world, and they projected multifamily vacancy at 4.9% by the end of 2025, meaning demand is absorbing available supply at a pace that keeps vacancy near historical lows even as new construction came to market. Cushman Wakefield reported that approximately 102,000 units were absorbed in just the first quarter of 2025,— a 12% increase over the same period the prior year. And then there's the homeownership problem. Mortgage rates have stayed elevated. Home prices have stayed near all-time highs. The median existing home sale price reached $414,000 in April 2025, according to the National Association of Realtors, the 22nd consecutive month of year-over-year over a year price increases. What does that mean for rental demand? It means people who plan to buy a home in the next few years are still renting. Some of them are renting far longer than they expected. A slow home buying market does not reduce housing demand, it redirects it. It creates more renters and it keeps them renting longer. JP Morgan has reported that multifamily housing historically holds up well in mild recessionary periods precisely because housing remains a necessity regardless of economic conditions. We focus on what I call needs-based markets—secondary and tertiary cities with population and employment growth, rent-to-income ratios that support real affordability, and limited new supply coming online. We're not competing for trophy assets in gateway cities. We're buying in markets where the fundamentals are strong, the people who live there have real need for housing, and supply is disciplined. We look for properties that are underperforming operationally, not broken, just not being run as well as they could be. And when we acquire those properties and bring in our own management team, we can improve occupancy, reduce expenses, and increase cash flow in ways that a third-party manager typically cannot. We built our property management company ourselves for exactly this reason. That's the value-add model. And it works because the underlying demand—working people who need a place to live—does not disappear when the market gets harder. Here's something counterintuitive about workforce housing that I want you to understand. When economic conditions get harder, luxury apartments face real pressure. When people lose jobs or tighten their budgets, they move down the rental market. They don't leave the market, they move down. Class A buildings lose tenants to Class B, and Class B, which is where we operate, tends to see demand hold or even increase. It's not a prediction. It's a pattern we've seen play out across multiple market cycles, and it's one of the reasons workforce housing has historically been among the most resilient residential asset classes available. Our track record across our own portfolio shows that consistent occupancy and steady cash flow are achievable in this space, even when conditions are difficult. That doesn't mean it's without risk. No real estate is, but it is a risk profile we understand deeply and one we've managed successfully for nearly two decades. Workforce housing is not a flashy investment thesis. It does not require predicting the next hot market or timing a cycle perfectly. It requires finding assets that serve real people with real needs and operating them well enough to generate consistent returns. That's what we do, and that's why workforce housing is at the center of what backs our Freedom Notes investment. In our next video, I want to talk about senior housing and the demographic wave behind it that no market cycle can slow down. Go to chatwithfreedom.com if you want to see what's in our current portfolio and how we think about each acquisition. I hope this was helpful, and I hope we have the opportunity to work together.