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An Austin investment fund created to support and stabilize middle-income rental housing has been verified as an attractive and viable investment by researchers from two Texas universities.

Affordable Central Texas, which began acquiring middle-income rental communities in late 2018, has been found to have a higher return (9.4 percent) and lower risk (a spread of 2.6 percent) than similar investments in high-income and luxury properties across the country. The eight-month study from University of Texas associate professor Jake Wegmann and Southern Methodist University real estate researcher Mark Roberts looked at data in Atlanta, Austin, Dallas, Denver, Houston, Phoenix, Seattle, and Washington D.C. from 2011-2021. (New York City, Chicago and Los Angeles were excluded because they lacked enough middle-income assets to meaningfully study.)

The data gathered and analyzed from the National Council of Real Estate Investment Fiduciaries showed that middle-income rental housing performed well and behaved independently of stocks and bonds’ returns, with strong returns despite capital costs that are higher than upper-income housing investments. The study was sponsored by Affordable Central Texas and the Wells Fargo Foundation.