Sometimes things work the opposite of the way they should. Now, for instance. If apartment finance worked as it should, lenders' and investors' money would find its way naturally into solid business opportunities.

But, as this issue of Apartment Finance Today affirms, that's not the way most of our audiences would say things work in the real world. Two major obstacles here: Wall Street and Capitol Hill.

Big-money real estate, such as it is, is a risk–reward hodgepodge of speculation, local idiosyncrasies, policy, and, now, a global economic tidal wave that crashes through every part of the broader economic and housing landscapes. So, what constitutes a good business—or could potentially perform a solid operation that meets a market need, pencils profitably, and runs well—does not necessarily bubble up among capital's Wall Street gatekeepers. Nor do the projects where the need and opportunity stars align work much magic among policymakers who may lack the political will to channel Uncle Sam–backed dollars.

Speaking of bubbles, Wall Street is as likely to me-too themselves into an unsustainable bubble in the “sexy six” markets—like a whole troop of Cub Scout campers each trying to toast a marshmallow over a campfire with a few glowing embers—as they are to plow their troves of yield-seeking funds into multifamily projects that will make sense beyond the frenetic flurry of the moment. So, exactly the issue that's causing such a compelling stir on Main Street—the growing divide between a tiny percentage of “haves” and a huge universe of “have-not-enoughs”—is playing out in the real world of multifamily housing finance.

Intellectually, everybody understands the risks involved in pouring too much money into too tight an arena. Too many dollars from too many separate sources that funnel narrowly into the same finite opportunity force pricing and pro formas unsustainably and irresponsibly into a vortex. Repeatedly, we hear that while multifamily projects have proven through the years to be among the strongest, most-reliable asset classes for lenders, those very lenders—the government-sponsored enterprises among them—are hemming and hawing about chancing support for any project that doesn't originate from the most proven, most well-heeled sponsors.

So, we'll suggest here that our audiences heed the Wayne Gretzky principle of apartment finance, which is to go not where the money is but where it's going. This is why Jerry Ascierto's analysis, “Hot to Trot,” starting on page 21 of this issue, is must reading for prospective stakeholders, sponsors, and wannabe developers eyeing Renter Nation's burgeoning demand wave.

Likewise, now that Uncle Sam, via the Federal Housing Finance Agency conservatorship of Fannie Mae and Freddie Mac, has thrown its subsidization heft behind single-family rentals via its fledgling REO Rental Initiative, the same healthy disdain may be called for. (See Jerry's examination of this issue in “The Top 5 Risks of Single-Family Rentals,” on page 26.) When Wall Street and Capitol Hill interests synchronize so felicitously, one can only shrug and resort to pushing ahead with a solid business plan.