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Affordable Rental Housing Preservation: The Basics

In high-cost and rising-cost areas, rental housing preservation helps promote and sustain mixed-income communities by ensuring the ongoing availability of quality, affordable rental homes. In recovering and low-growth areas, rental preservation ensures quality housing for low-income households. Long-term availability of quality, affordable rental homes is an essential part of the housing stock for working families, older adults, people with a disability, and others. Preservation of existing affordable rental housing has grown in importance as ongoing and projected demand for rental housing steadily rises, and many of America’s urban cores have experienced population gain and gentrification.

Affordable rentals are disappearing rapidly in many places. In the 10 years prior to the 2007 housing market downturn, more than 1.2 million unsubsidized units were lost, either to escalating rents or condominium conversions in strong markets, or to abandonment and demolition in weaker markets. The Joint Center for Housing Studies of Harvard University estimates that at least 2.2 million privately owned and federally assisted units are at risk of being lost between 2015 and 2025.

No single policy can ensure that affordable rental homes are preserved. Rather, multiple, coordinated and flexible policies are needed to identify properties at risk, provide the resources needed to facilitate the rehabilitation and/or purchase of target properties and create the incentives needed to encourage owners to preserve and improve their properties.

Affordable rental housing preservation initiatives can be applied in both growing and softening markets. While most rental housing preservation efforts focus on ensuring the ongoing affordability of properties with expiring federal or state subsidies, some communities are deploying resources to preserve unsubsidized affordable rental properties, sometimes referred to as market-rate affordable. Each year, a portion of this unsubsidized but affordable inventory is lost. When market rents or land prices increase, owners of affordable rental homes sometimes seek to upgrade their properties and rent or sell them to higher-income households. This is one way that affordable homes leave the affordable stock. On the other end of the spectrum, many affordable properties do not charge high enough rents to support maintenance and improvement of the property, and owners allow them to deteriorate. At some point, these properties cease to provide quality affordable housing opportunities

Not every property can or should be preserved. Some properties are simply too physically deteriorated or financially unstable to be preserved. But much of the existing rental housing stock can be preserved as a quality, affordable housing resource. Simply put, affordable rental homes play a critical role in the nation’s housing stock. It is much more efficient to preserve this resource than to recreate it.

Importance of affordable rental housing preservation

Nearly all of us are renters at some point in our lives — whether as a young person, a family moving to a new job opportunity or a retiree living on a fixed income. Rental housing is key to a sustainable workforce for a region, and rental homes play an important role in our economy and are as critical to our nation’s infrastructure as highways, transit systems, schools and industry.

The preservation of affordable rental properties allows working families, individuals, older adults and others to live in stable environments and within their financial means. By helping to ensure the continued availability of affordable rental homes, preservation policies help households spend a reasonable amount on rent and utilities, leaving them better positioned to afford basic health and food costs and to save funds: for weathering the unexpected — loss of employment, medical issues, vehicle repairs, etc.; for expanding their economic opportunities — savings for education, training, etc.; or for a major purchase — such as the down payment on a home.

Preserving existing rental properties helps to conserve billions of public dollars already invested in the affordable rental housing supply. For over 40 years, federal tax policy and housing programs have encouraged private owners and investors to develop rental homes. These homes play a critical role in housing low- and moderate-income households. Due to the high costs of construction, the strong competition for land that drives up land prices, limited availability of new federal rental subsidies and more stringent requirements on private capital, affordable rental homes that are lost are unlikely to be replaced through new construction. In most cases, it is also less expensive to preserve existing affordable rental homes than to build new ones.

The loss of stable affordable rental homes can mean upheaval in a neighborhood, displacement of long-time residents and a loss of the community’s traditional character — particularly in communities where rents are rising. Well-maintained rental homes that are affordable to low- and moderate-income households and others can contribute to neighborhood stability, combat the negative effects of gentrification, and create or preserve diverse, mixed-income. The availability of affordable rental homes may also make it possible for homeowners who have undergone foreclosure to remain in their old neighborhoods as renters, helping to minimize disruptions at school and work.

When existing rental homes are, their preservation can also improve the quality of life of residents and the surrounding community. Families living in such locations tend to depend less on personal vehicles than do families in more remote locations, helping to reduce their transportation costs, energy usage and commute time. The reduction in car usage also may help to ease congestion and traffic for others in the community. These transportation benefits are especially important for fixed-income households and lower-wage workers.

Indeed, preservation is inherently “green” and environmentally responsible. The preservation of existing affordable housing produces less waste and uses fewer new materials and less energy than does new construction.

Rental housing preservation is also an important strategy for preserving income diversity in many settings, including:

  • high-cost neighborhoods where replacing lost affordable homes is often difficult and expensive;
  • gentrifying neighborhoods where escalating rents, demolitions, expiring subsidy contracts or conversions from apartments to condominiums threaten to displace low-income households; and distressed neighborhoods, where affordable rental homes are often at risk of loss to deterioration and where preservation can be part of a revitalization effort.

Rental preservation protects residents

One of the key benefits of affordable rental housing — particularly subsidized housing — is the stability that it provides families. When families have a stable place to live, and pay an affordable share of their income for rent, they may be better positioned to succeed in other aspects of their lives, including job search and retention, maintenance of treatment regimens necessary for their health and at school.

When rental homes become unaffordable, this stability may be jeopardized, as families are forced to move to other developments — in some cases, in unfamiliar neighborhoods. “Tenant protection” vouchers  (TPVs) enable families living in  housing, and certain other federally subsidized developments, to stay in the development at an affordable rent even after rent restrictions expire, assuming the building remains as a rental development. Public housing authorities administer TPVs. The vouchers are tenant-based rental assistance and enable families to move to another location if the development will not stay as a rental or if families wish to exercise their right to move. TPVs preserve affordability for a current resident but do not ensure that the affordable housing unit remains affordable for the long-term. Preserving an entire property as affordable housing would be the preferred option.

Approaches to Affordable Rental Housing Preservation

Depending on location and other circumstances, either or both of the following types of preservation may be involved for any given property:

  • Use Preservation is the maintenance, sale or transfer of a property that keeps rents affordable for the long-term, by maintaining or adding subsidies, refinancing existing debts and introducing or modifying income eligibility and affordability restrictions.
  • Physical Preservation is the maintenance and improvement of the physical condition and financial viability of a rental property so that it can provide a long-term source of decent, safe and attractive housing that benefits families, neighborhoods and communities.

State and local governments have responded to the challenge of rental housing preservation by adopting a range of successful tools. For example, most states prioritize the preservation of existing affordable homes in their This strategy can prevent a challenge because it slows the growth of new units.

Some cities have also established incentives, such as A number of cities have worked with lending institutions to help smaller property owners to access affordable capital to modernize their properties and provide funds for larger rehabilitation projects that help maintain the supply of affordable rental homes. Additionally, state and local governments have funded trust funds for affordable housing to help increase supply and preservation.

Key Resources

Websites

The California Housing Partnership Corporation (CHPC) is a private nonprofit organization that helps nonprofit and government housing agencies to acquire and preserve affordable housing in California. In addition to financial consulting services, CHPC provides training to housing organizations and maintains data on at-risk properties.

Chicago Rehab Network
A citywide coalition of neighborhood and community-based development organizations advancing the development and preservation of affordable housing in Chicago and the state of Illinois through training, technical assistance, research and advocacy.

Community Economic Development Assistance Corporation (CEDAC)
Massachusetts’ public-private community development finance institution provides technical assistance, predevelopment lending and consulting services to nonprofit organizations involved in affordable rental preservation and other community development activities.

The National Council of State Housing Agencies has a section on the organization website that collects news and information related to preservation.

The preservation section of the National Housing Law Project’s website contains laws, cases and articles related to subsidized housing preservation (both HUD- and USDA-assisted).

The National Housing Preservation Database can provide states and localities with a good head start on creating their own databases of at-risk properties. This database incorporates all available data on federally subsidized housing properties and includes nine separate funding streams. It was produced by the Public and Affordable Housing Research Corporation and the National Low Income Housing Coalition and is updated twice a year.

National Housing Trust
National nonprofit engaged in housing preservation through public policy advocacy, real estate development and lending. Website features a wealth of resources related to housing preservation, including best practices, case studies and additional resources. Among the many resources available through the website is the regularly updated working paper providing detailed information on State and Local Housing Preservation Initiatives.

Stewards of Affordable Housing for the Future (SAHF) is an association of national nonprofit organizations that acquire and preserve multifamily housing as affordable to low-income families, seniors and disabled individuals. SAHF’s website features a library, information on peer networks and case examples.

The Network for Oregon Affordable Housing
Nonprofit consortium of Oregon banks that administers the Oregon Housing Acquisition Fund and manages the Oregon Housing Preservation Project.

The Shimberg Center for Housing Studies at the University of Florida
Provides data and applied research on housing preservation and development and manages the Florida Housing Data Clearinghouse, which includes data on the subsidized housing stock in each Florida community. Also has produced an interactive map of preservation data collection efforts in each state.

Articles and Reports

Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation’s Window of Opportunity Initiative. 2016. Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine. Santa Monica, CA: RAND Corporation.

America’s Rental Housing: Expanding Options for Diverse and Growing Demand. 2015. Cambridge, MA: Joint Center for Housing Studies of Harvard University.

Opting In, Opting Out a Decade Later. 2015. Washington, DC: Submitted by Economic Systems (Fairfax, Va.) for the U.S. Department of Housing and Urban Development Office of Policy Development and Research

Preservation of Affordable Homes Near Transit Toolkit.  2015. San Francisco, CA: California Housing Partnership Corporation.

Preserving, Protecting, and Expanding Affordable Housing: A Policy Toolkit for Public Health. 2015. Oakland, CA: ChangeLab Solutions.

Small Multifamily Rental Housing. Spring 2015. Community Developments. Washington, DC: Office of the Comptroller of the Currency, U.S. Department of the Treasury.

The Challenge of Rising Rents: Exploring Whether a New Tax Benefit Could Help Keep Unsubsidized Rental Units Affordable. 2015. New York City, NY: New York University’s Furman Center for Real Estate and Urban Policy.

Strategies that Work: Preserving Affordable Rental Housing. 2014. Chicago, IL: Preservation Compact.

Comparing the Costs of New Construction and Acquisition-Rehab in Affordable Multifamily Rental Housing. 2013. Maya Brennan, Amy Deora, Anker Heegaard, Albert Lee, Jeffrey Lubell and Charlie Wilkins. Washington, DC: National Housing Conference.

HUD PD&R Edge: Preserving Affordable Rental Housing 2013. Washington, DC: U.S. Department of Housing and Urban Development.

The Preservation Guide—Federal Housing and Homelessness Plans: Potential Tools in the Affordable Housing Preservation Toolbox. 2010. Washington, DC: National Low Income Housing Coalition.

Taking Stock: The Role of “Preservation Inventories” in Preserving Affordable Rental Housing. 2009. Washington, DC: National Housing Conference.

A Guide to Best Practices in Rural Rental Preservation. 2008. Washington, DC: Housing Assistance Council.

Preservation of Affordable Multifamily Housing. Spring 2008. Community Developments. Washington, DC: Office of the Comptroller of the Currency, U.S. Department of the Treasury.

A Preservation Strategy for Florida’s Affordable Multifamily Housing. 2006. Affordable Housing Study Commission. Tallahassee, Fl.

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