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Strategies for the Preservation of Affordable Housing

Scott McGill | December 1, 2021

4 Minute Read

Graphic representation of affordable housing preservation.

Across the United States, local leaders are searching for strategies for the preservation of affordable housing in their communities — and for good reason.

The shortage of affordable homes has reached crisis levels in many American cities. For every 100 extremely low-income renters, only 37 affordable and available housing units exist. As of 2019, 30 percent of American households were “housing cost-burdened,” spending more than 30 percent of their incomes on rent or a mortgage. One in seven American households were severely cost-burdened, spending at least half of their incomes on housing.

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This lack of affordable housing has dire consequences for citizens and their communities. Being cost-burdened or housing insecure increases the risk of homelessness, perpetuates intergenerational poverty, and increases reliance on expensive social programs funded by taxpayers. In fact, research shows that improving access to affordable housing is the most cost-effective way to reduce child poverty and expand economic mobility for American families.

Building new affordable units is vital to solving the affordability crisis, but the preservation of affordable housing that already exists is just as important. Unfortunately, the supply of existing affordable housing is eroding steadily in many communities.

Why the Preservation of Affordable Housing Matters

Inclusionary zoning policies typically have a sunset period, when rents can become market-rate on the affordable units created under the ordinances. Developers who build affordable housing using the federal Low Income Housing Tax Credit can raise rents after a certain number of years. Communities lose other units to blight, gentrification, or even wealthy buyers turning multi-unit buildings into single-family homes.

Preserving these at-risk units is a smart goal for local leaders interested in making their communities more affordable, for a number of reasons:

  • The preservation of affordable housing is typically cheaper than building new units. Research from the Center for Housing Policy found that, on average, new construction costs between $40,000 and $71,000 more per unit than purchasing and rehabilitating existing buildings.
  • Preserving existing housing is almost always faster than building a new development, which can take years to move through the planning, financing, and approval processes before it reaches the construction phase. With more than 580,000 Americans without homes, speed matters.
  • Finally, the preservation of affordable housing is usually easier than constructing new developments. Existing buildings already conform to local land-use ordinances, and the surrounding city infrastructure — like sidewalks, schools, and sewer systems — are typically already in place and equipped to support the building’s residents.

Fortunately, there are a number of strategies local leaders can use to reap these benefits and preserve affordable housing in their cities:

Strategy #1: Preservation Databases

A well-run preservation database is a powerful tool for monitoring and maintaining a community’s affordable housing stock. The databases bring together a wealth of data about the affordable units in a community. They include information such as location, number of residents, which program they were created under (or whether they’re naturally occurring), when their affordability requirements expire, recent code violations, and more.

Without one, cities are tasked with the nearly impossible challenge of evaluating and analyzing the stock of affordable housing units by hand or through disparate spreadsheets. This means it can take substantial time to identify which affordable housing units are at risk, and some at-risk properties may never get identified in time.

Collecting this information is the first step in getting a comprehensive picture of a community’s affordable housing stock. High-quality preservation database software will include tools to analyze this data and create charts and graphs that make trends easy to visualize. Equipped with these insights, local leaders will be in a much better position to make policy decisions geared toward the preservation of affordable housing. Furthermore, housing program managers will be able to spot at-risk units early so they can target preservation efforts where they’re needed most.

Strategy #2: Tenant Opportunity to Purchase

The first Tenant Opportunity to Purchase Act (TOPA) law was adopted in Washington, D.C. in 1980. Since then, it’s been credited with preserving thousands of affordable units by preventing them from falling into the hands of new owners who could raise rents to market-rate levels. A number of other cities, including Minneapolis and Portland, are experimenting with the policy.

TOPA laws require building owners to notify renters when they’re planning to list their buildings for sale. The residents then have a window of time — typically between 30 and 90 days — to put an offer on the building, or to find an interested third-party willing to purchase the building and keep the units affordable. There are a number of nonprofit organizations and community development corporations that routinely purchase such buildings for this purpose.

For these laws to be successful, residents need to:

  1. Be notified quickly of their building’s intended sale (this is when a preservation database could come in handy), and
  2. Be connected with organizations that may be interested in purchasing the building or financing its purchase.

As D.C.’s example demonstrates, TOPA laws can be an incredibly effective strategy for the preservation of affordable housing when done correctly.

Strategy #3: Improved Code Enforcement + Rehabilitation Funding

A good code enforcement process can go a long way toward preserving a community’s affordable housing stock by preventing buildings from falling into a state of disrepair that could eventually lead them to becoming uninhabitable or force the owner to sell. Cities that are using outdated systems to enforce their municipal codes should consider investing in integrated code enforcement software that makes the entire process as thorough and efficient as possible for program managers, field workers, and building owners alike.

When paired with funding streams for rehabilitating distressed buildings, code enforcement becomes a smart strategy for the preservation of affordable housing. Building owners should not just receive citations for code violations, they should be connected with resources that will help them bring their buildings up-to-code and preserve affordable units.

This can often be accomplished for a negligible amount of money. In Chicago, for example, a program that funds renovations for distressed buildings helped to preserve more than 16,000 units between 2015 and 2018 at a cost of roughly $1,700 per unit on average.

A patchwork system of rehabilitation-focused funding streams exists across various cities and states. Local leaders would be wise to make it as easy as possible for the owners of affordable buildings to get connected with these resources.

Preserving Affordability in Your Community

Every city leader wants residents to have affordable, safe places to live, and the preservation of affordable housing is an important part of that vision. By combining preservation-minded policies with smart software solutions that make it easy to manage programs and keep an eye on a city’s housing stock, local leaders can support housing stability and economic opportunity for every resident.

To learn more about how digital tools can help preserve affordable housing in your community, check out this case study.

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