Recent advances in Private Initiative of Social Housing in Italy. Some remarks about economic and financial sustainability of projects

In recent years the perspective of Social Housing has been dramatically shifting the focus from the public sector to the real estate investment opportunity for many players. This is basically due to the economic crisis, which pushes the demand for housing that – in turn – attracts private investors worried about vacancy rates steadily increasing in most of the traditional sectors. Social Housing seeks to provide new kind of accommodation at a price lower than the average market price, to answer to a new segment of customers that – on the one hand – cannot access to public housing (because they are not poor enough) and, on the other hand, they cannot get the private market, as they are not rich enough. However, social housing has been traditionally considered far from profitability, capital gain, return of investments and so on. Indeed we need to bridge the gap between the traditional view above and the vast debate issued among some major real estate companies, public institutions, non-profit and profit-oriented investors. This leads to study and explain the economic and financial standpoints that push private operators to invest in residential, so far neglected because of its supposedly low profitability index. This paper addresses the issue above by making some remarks about the potential of this new field, which is likely to be one of the biggest contributor to the development of a Country. More in detail, the paper analyses some relevant conditions that make an investment in social housing interesting for private operators. Then the paper moves on an analysis of the most effective strategies an actor involved in a social housing initiative can afford to increase the return on investment and to mitigate some specific risks of social housing projects, like insolvency, loss of value and risk of capital.