This article is part of the 2025 Mid-Year Housing Industry Update. Click here to read the full newsletter.
Workforce housing (also referred to as middle-income or essential housing) is becoming a central focus for communities across the country. Whether you're a city, town, village, housing authority, developer, or part of the workforce, providing or finding a safe, habitable, and affordable place to live is a paramount concern.
The industry is increasingly focused on finding innovative, practical solutions to support individuals and families earning between 60% and 120% of the area median income (AMI), particularly in high-cost regions like resort towns or major metropolitan areas, where wage growth fails to keep pace with the rising cost of living.
In addition to traditional affordable housing tools—such as Low-Income Housing Tax Credits (LIHTC), tax-exempt bonds, loans, and federal subsidies—market participants are turning to creative financing models to bridge the gap. These include public-private partnerships between cities or local housing authorities and developers, governmental ownership, and 501(c)(3) ownership structures.
One standout example is California's Joint Powers Authority (JPA) model, which allows local governments to issue tax-exempt governmental bonds to acquire and own multifamily apartment complexes. Under this model:
- The JPA partners with a private development company and property management company.
- Income restrictions (ranging from low to middle income, with some market rate units) are voluntarily applied for 15 years.
- A mortgage can be granted on the property as security for the financing.
At the end of the 15-year period, the city or local agency can:
- Pay off the outstanding debt and take ownership, or
- Wait for the bonds to mature and have the property revert automatically to the agency.
In either case, the city or agency retains flexibility to maintain the existing income restrictions or reconfigure the property to fit future housing needs.
Financing is only part of the puzzle. Forward-thinking organizations are also exploring new construction technologies to lower costs and scale production, as seen in a few examples described below.
Modular Housing: These homes are constructed off-site, assembled on location, and can reduce labor and material costs while accelerating timelines. Developers and local agencies are increasingly partnering to bring modular homeownership options to high-cost areas.
3D-Printed Housing: Advances in technology are creating opportunities for alternatives to the traditional brick and mortar. Using concrete or wood residuals, these homes are built layer by layer with industrial printers. A 3D-printed neighborhood is currently underway in Austin, Texas, and in places where populations are expected to grow rapidly (or already have housing shortages), this technology could help address housing shortages.
As the housing crisis continues to challenge municipalities and working families alike, the combination of innovative financing and cutting-edge construction may be key to expanding workforce housing. From reimagined ownership structures to next generation building techniques, public and private stakeholders are finding new ways to minimize the housing gap and build a sustainable future for the working middle class.
The following two case studies highlight how Ballard Spahr helps bring forward-thinking strategies to life across a range of housing challenges—from middle-income solutions to broader affordability needs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
