February Newsletter
By Jesse Etherington
Pro Commercial
February 28, 2025
If there’s one real estate sector still flying under the radar (but packed with potential), it’s workforce housing. According to a recent JPMorgan report, demand for affordable rental options is surging as middle-income earners, including teachers, healthcare professionals, and first responders, get priced out of homeownership.
With mortgage rates still high and home prices holding strong, more people who would’ve bought homes are staying in rentals, tightening supply and pushing demand even higher. That’s where workforce housing comes in, not only as a recession-resilient asset class, but as a critical piece of the housing market that cities are eager to support.
Cities Are Making Workforce Housing Easier to Build
To keep up with demand, municipalities are rolling out major incentives to attract developers, including:
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Tax credits and abatements that cut down upfront costs
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Low-interest loans and grants for qualifying projects
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Discounted land leases on public property
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Expedited permitting to speed up construction timelines
How Investors and Developers Can Tap In
For investors looking to expand their portfolios, workforce housing is a smart bet. Strategies that are gaining traction include:
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Adaptive reuse – Converting underutilized office or retail spaces into rentals
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New construction – Using modular and prefab methods to keep costs under control
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Public-private partnerships (P3s) – Leveraging municipal incentives to secure financing and land deals
New tariffs on steel and aluminum are about to hit the construction industry hard. Set to take effect on March 12, 2025, the 25% duty on all steel and aluminum imports is expected to drive up material costs, putting pressure on contractors, developers, and project budgets in the short term.
What the 2018 Tariffs Taught Us
We’ve seen this play out before. According to Construction Dive, the last round of steel tariffs in 2018 led to:
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A 19% drop in steel imports within the first year
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A 14% spike in steel prices, which later settled at a 10% increase by 2019
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Higher raw material costs, leading to project delays, budget overruns, and pricing uncertainty
If history is any indication, we can expect a similar pattern this time around—initial price surges followed by gradual market stabilization.
How to Stay Ahead of Rising Costs
For developers and contractors planning projects in 2025, material pricing will be a key factor in keeping jobs on track. Here’s how to get ahead of the curve:
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Lock in pricing now – Securing steel and aluminum costs early can help hedge against price hikes.
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Explore alternative materials and suppliers – Domestic sourcing or material substitutes could provide cost advantages.
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Adjust contracts proactively – Price escalation clauses and contingency planning can help absorb unexpected cost swings.
In today’s world, with the ever-changing ups and downs of markets, the economy, and leadership shifts on both a national and global level, and all the way down to our personal lives, it’s easy to feel a sense of anxiety and fear. This makes sense, as we, as humans, crave certainty. Certainty provides a sense of security and peace in our lives because, ultimately, we seek rest and stability. This is why we desire and pursue certainty in everything we do.
The problem with that pursuit is that true certainty is not achievable, at least not if we base our peace, safety, and security on our circumstances. If we do, we will find ourselves in a never-ending cycle of anxiety, unease, and restlessness.
Why is it that we so often hear stories of loved ones reaching the end of their lives and looking back with thoughts like, “Why did I ever get so anxious about such things?” or “Why did I give so much of my mental energy and time to those fears?” These reflections reveal something important: the problems and uncertainties that seem overwhelming in the current moment rarely deserve the amount of fear and anxiety we give them.
The truth is that life is an adventure. Life is a mystery. We can never be truly certain about our circumstances. You could take every precaution possible to protect yourself, yet all those layers of protection could be wiped away in an instant. But if we embrace the reality that life is an adventure, if we lean into the unknown rather than fear it, we open ourselves up to something far greater than we can imagine.
Think of the steps you would take. Think of the actions you would pursue. Think of the fearless life you would live.
Then, one day, when you reach the end of your life, you won’t be left thinking, “I wish I had done this” or “I wish I had done that.”
Now, this is not a call to act unwisely or recklessly. We will always reap what we sow. But internally, in your heart and mind, I encourage you to embrace the fact that life is a mystery and an adventure and then live accordingly. Be okay with the unknown. The true lie is you won’t be okay when you do.
Jesse Etherington
(641) 257-9286