2 min read January 2022 — The San Antonio area, like the rest of the country, is challenged to solve the affordable housing equation, says A. David Lynd, CEO of investment and property management company Lynd Living. “If it was not evident before, and people did not really take it seriously, there were people shouting from the rooftops that the United States has a housing affordability crisis. We do not have places where people can live that are affordable for their budgets,” he told Invest:, while also addressing his outlook for the future of San Antonio’s real estate market.
What were Lynd Living’s priorities and how did it perform in the past year?
We bought a tremendous number of assets during the pandemic, which is somewhat rare. We closed on about $600 million between development and acquisitions during that time frame. If it was not evident before and people did not really take it seriously, there are people shouting from the rooftops that the United States has a housing affordability crisis. We do not have places where people can live that are affordable for their budgets. It starts forcing your workforce farther and farther away from work centers. Such long commutes create poor quality of life. The pandemic and the recent run up in inflation have really highlighted that rents are rising faster than wages. If you want to build where people want to work, the cost of land and construction are so high that you have to charge exorbitant rents to be able to actually build the project and have it make any financial sense. There is going to be a huge push for affordable housing. In the most recent forms of the bills being passed, there is a tremendous amount of money for vouchers and affordable housing. We are doing our first tax credit deals this year to try to help meet that demand and do our part for delivering affordable housing.
Another area that we launched in 2021 was the single-family rental platform. There is a big trend in multifamily where 43% of all renters surveyed wish they could buy a house and cannot afford one. There has been a large demand growing in our space for professionalized single-family housing as rentals.
Our acquisitions business is going full steam ahead. The business of buying older properties, fixing them up and repositioning them is a business that will never end. There is always the opportunity to buy and upgrade projects that are older, meet the demand of the market and deliver the kind of products that people are looking for in today’s world. That business is highly mature and a strong force. We will continue to find opportunities to buy and turn assets around to create value for local residents. On the development front, we have around 5,000 units in our pipeline, which is about $1 billion worth of projects.
How does the company strike that balance between low inventory and the arrival of new residents?
We sit in that crossroads of conflict of interest between the quality of life that exists at a property and its affordability. Our job as a manager and an investment manager is to max out the returns for our partner. When you do that, it does not necessarily lend itself to the affordability argument. Our owners are seeking the highest returns possible, which means pushing rents as the market allows. We are in a strange environment right now. Freezing evictions and the stimulus money has artificially occupied properties because there are several people who are not paying their rent but could not be thrown out. Those would usually be vacant units that people coming in could rent. Fewer available units make rent prices go through the roof.
This pressure on rents is artificially high because of inflation.
What is your overall outlook for the real estate sector in the San Antonio market?
My outlook is very positive. Our priority for the near term is to focus on the transactional side of our business: buying and building. We have so much in our pipeline that 2022 is shaping up to be an extremely busy year for us. We are going to experience the most growth on our culture side and things we are delivering to our business. We are infusing a huge health and wellness component into our business. If you invest so many hours a month in yourself, taking care of yourself through diet and exercise, then you will be able to earn a half day off once a month. We are going to infuse health and wellness into our corporate culture. We are also rolling out a best-in-class insurance program.
If your employees are happy and you treat them right and you take care of them and you give them the best, then you can expect the best. We are going to continue to expand and add to that corporate culture over the next year, coming up with things that really differentiate us against our competitors in terms of how we treat our people.
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