“There is only one way to happiness and that is to cease worrying about things which are beyond the power of our will.” — Epictetus 

Nicholas,

Happy New Year! I have been finding more time to read this month and thought this quote from the Greek philosopher Epictetus was a nice way to start the new year. As we enter another year on this amazing place we call home, I hope you all can find more happiness and less worry in 2024. 

Looking back, I am immensely grateful for all our members whose support has fueled our quest to increase the flow of impact capital to support affordable, sustainable, and equitable rental housing in the United States.  

Looking forward, I am ready to get back to work. And with the successful rollout of our Impact Framework behind us, we will be even more intentional and focused on delivering actionable value to our members and the broader industry in three key areas: 

1.  Adoption of the Impact Framework. We did not build the framework as a thought exercise. We built it to be put to use. Already, more than 400 organizations have downloaded the framework, and we are continually adding to our list of framework adopters. In the coming months, we will be rolling out a series of framework training modules and will always be available to hop on a call if you have questions or need help in the adoption process. The path to establishing industry standardization begins with agreement on a common framework that is broadly adopted across the industry. If your organization has already downloaded the framework, let us know how we can help you adopt it into your impact strategy. If you have not yet downloaded it, please feel free to do so. It is free by design – so take some time to check it out. 
2. Developing Impact Investing Tools and Resources. Increasing the flow of impact-driven private capital requires more than establishing a common industry framework. It also will require that we build a platform to share research, best practices, and tools to educate and support the investors, lenders, property owners, service providers, and students who will make multifamily impact investments a credible and distinct asset class in the years ahead. 
3. Membership Growth and Partnerships. Of course, achieving our focused mission relies on our members' support, feedback, and guidance. We have revised our membership fee structure to encourage more participation from organizations of all shapes and sizes. So, If you're interested in becoming a member of the MIC, please check out our website and contact me directly for a deeper conversation. We'll also continue to build partnerships with industry associations and broader ESG certification organizations to ensure our efforts are aligned and additive. We have several exciting partnerships that we look forward to rolling out in the months ahead! 

As you can see, the Multifamily Impact Council has come a long way. But we are just getting started and looking forward to creating more value for the industry in the months and years to come.   

Someone else who's looking ahead to the new year is Amanda Nunnink. Amanda is senior managing director and co-head of multifamily impact housing for MIC member Kayne Anderson's real estate group and a member of the MIC's Board of Directors. 

In this month's interview, Amanda shares what she's hearing from global impact investors, where she sees opportunities for investors in 2024, and what risks impact investors should be thinking about. 

I hope you enjoy this month's newsletter and look forward to working more closely with all of you in the new year to improve the lives of renters, address climate change, and deliver stable investment rates of return. 

Be kind. Be at Peace. And thanks for your time. 

Bob Simpson 

President and CEO 

Multifamily Impact Council 

Amanda Nunnink is co-head of the Impact Housing team at KA Real Estate. She is responsible for sourcing, analysis, underwriting, and execution of investment strategies and works with joint venture partners to oversee the day-to-day management of KA Real Estate’s multifamily housing impact investments.

What have you been hearing from global impact investors about what's on their minds and where they are focused?

One theme that emerges consistently in conversations with investors is the affordable housing crisis. Regardless of what country, city, or submarket you are in, we all know someone impacted by a lack of affordability. Most cities and countries are facing similar challenges, and there are deep desires to create more affordable options for both renters and homeowners. From an investment standpoint, housing is an asset class with incredible opportunities to demonstrate measurable impact on individual investments.

Are you seeing a difference between where U.S.-based impact investors are focusing vs. non-U.S. investors?

Global investors remain committed to reducing carbon emissions, promoting net zero strategies, and decreasing energy utilization. They are demanding tangible reductions, and third-party validation of these efforts – via GRESB or EnergyStar benchmarking, as examples. We aren’t seeing global investors shy away from sustainable commitments, even in a challenging investment market.  

What trends or opportunities are you seeing for impact investors heading into 2024? 

Reporting and data requirements are becoming increasingly robust, and investors are rightfully hedging against green-washing, and therefore requiring actual (not modeled) data when it comes to reductions in emissions and energy utilization, for example. There are immense opportunities for asset owners to provide third-party validation of data through GRESB and Energy Star benchmarking, among others. Another major opportunity is the decarbonization of existing multifamily assets.

For example, in the United States, there are over 20 million multifamily rental units; of those, a majority are over 20 years old. These are assets that weren’t built to accommodate the sustainable technologies often required during new construction in most municipalities today, presenting a huge opportunity for impact investors.  

What are some risks that impact investors should be thinking about? 

The regulatory environment is changing rapidly and varies across the globe. We have markets offering financial incentives while others are instituting fines. While the incentives create opportunity for transitioning assets and building to sustainable standards, fines can have an opposite effect. Investors need assurance that multifamily investments have taken this landscape into their analysis.  

Additionally, climate risk includes managing physical risk, assessing future risk and asset resiliency, as well as managing of insurance at the asset and portfolio level. Consideration of all these factors impacts asset-level valuation. While properties today might not trade at a discount based on a lack of sustainability, investors are anticipating one day this will be reflected in pricing.

Have news to share? Send your links to [email protected], and we'll spread the word in this newsletter and on our LinkedIn page.

• Enterprise Raises $444 Million in Two LIHTC Funds
• NMHC: Construction Market Remains Challenging for Multifamily Industry 
• Freddie Mac Predicts Tempered Growth for Multifamily in 2024
• Addressing the Affordable Housing Crisis