What Strategies Can Be Used to Preserve Affordable Housing in Booming Markets?

Affordable housing has become a significant issue in many rapidly growing cities. Housing is considered affordable if it costs no more than 30% of a household’s income, but for many families, this isn’t a reality. As communities face increasing challenges in maintaining affordability, the importance of strategies aimed at preserving our existing stock of affordable housing can’t be overstated. These strategies can range from policy changes, promotion of affordable rental units, community development, and public program intervention.

Policy Changes for Preserving Affordable Housing

Policy can play a pivotal role in either exacerbating or reducing the affordable housing crisis in burgeoning cities. More often than not, local housing policies are the determining factors in whether low-income families can afford to live in a city. Policymakers need to prioritize preservation over new construction, as it’s usually less expensive to maintain existing affordable housing than to build new units.

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Inclusionary zoning is a popular policy tool that requires developers to include affordable units in their projects. This approach not only creates new affordable units but also promotes socioeconomic diversity within communities. Additionally, ‘preservation ordinances’ can be adopted by cities to protect their existing affordable housing stock from being turned into high-end rentals or condos.

Tax abatement programs are another potential policy solution. These programs provide tax relief to property owners who agree to maintain a portion of their units as affordable. In return, they receive reduced property taxes for a specified term.

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Promotion of Affordable Rental Units

Investing in rental housing can be a strategic move to preserve the affordability of housing in high-demand markets. Rental housing is typically more affordable than homeownership and can provide lower-income households with more housing stability.

However, the affordability of rental housing often relies on the amount of available supply. To increase the supply of affordable rental units, cities can provide incentives for developers to build more rental housing. These might include zoning changes that allow for higher density, reduced parking requirements, or expedited permitting processes.

Another strategy is focusing on the preservation of Naturally Occurring Affordable Housing (NOAH). These are properties that, due to age, location, or condition, rent for less than newer or fully renovated properties. By investing in these properties, cities can ensure they remain affordable for the long term.

Community Development for Affordable Housing

Community development corporations (CDCs) and other community-based organizations can play a crucial role in preserving and expanding affordable housing. These organizations, rooted in the communities they serve, have a deep understanding of local housing needs and can make strategic investments to meet those needs.

One method is the creation of community land trusts. These nonprofit organizations acquire land to develop affordable housing and lease the land to low-income households, effectively reducing housing costs.

Furthermore, community development organizations can work to preserve existing affordable housing. By acquiring and rehabilitating aging rental properties, these groups can ensure they remain affordable and in good condition for the long term.

Public Program Intervention

Public programs can also be leveraged to preserve affordable homes. One of the most important federal programs in this regard is the Low-Income Housing Tax Credit (LIHTC) program. This program provides tax incentives to private developers to build or rehabilitate affordable rental housing.

Local governments can also establish housing trust funds. These funds, often capitalized with local public revenue, are dedicated to supporting a range of affordable housing activities, including preservation.

Additionally, housing vouchers can be used more strategically to preserve affordable housing. For example, cities can prioritize voucher holders for affordable units in neighborhoods with rapidly rising rents.

The Importance of Public-Private Partnerships

Public-private partnerships can be a vital tool in the preservation of affordable housing. By combining public resources with private capital, these partnerships can finance the acquisition and rehabilitation of existing affordable properties.

For instance, cities can partner with private developers or nonprofit housing organizations to preserve affordable housing. These partnerships might involve providing public financing or land in exchange for a commitment to keep rents affordable for a specified term.

Public-private partnerships can also promote the development of mixed-income housing, which combines market-rate and affordable units in the same development. This can be a successful strategy for preserving affordability in neighborhoods with rapidly escalating rents.

In conclusion, preserving affordable housing in booming markets is a multifaceted challenge. It requires a comprehensive approach that includes policy changes, promotion of affordable rental units, community development, public program intervention, and public-private partnerships. By implementing these strategies, cities can ensure that all residents, regardless of income, have access to affordable, stable housing.

The Role of Historic Preservation in Affordable Housing

Historic preservation can act as an unexpected savior in the crusade for affordable housing. Historic buildings, often overlooked in the real estate market, can be transformed into affordable units. These structures, with their inimitable charm and substantial construction, can provide low-cost housing without the high cost associated with new construction.

Historic buildings in neighborhoods like Los Angeles, New York City, and other booming markets often sit vacant or underutilized. With the right renovation and preservation practices, these buildings can be converted into affordable rental units. This approach not only saves historic structures from demolition but also adds to the supply of affordable housing without the need for new construction.

Renovating historic buildings for affordable housing can be cheaper than new construction, especially when rehabilitation tax credits are leveraged. The Federal Historic Preservation Tax Incentives program, for example, provides a 20% income tax credit for the rehabilitation of historic, income-producing buildings.

Historic preservation can also contribute to long-term housing affordability. By maintaining the existing fabric of neighborhoods, historic preservation can help prevent displacement and keep communities intact.

Implementing Effective Strategies: A Case Study

Let’s take the example of a real-life implementation of affordable housing preservation in a high-cost market. Jenny Schuetz, a housing policy expert, has worked extensively on preserving affordable housing units in Los Angeles, a city notorious for its high cost of living.

Schuetz initiated a housing program that involved converting historic buildings into dedicated affordable rental units for low-income households. The program capitalized on the city’s underused historic properties, transforming them into affordable homes without the expense of new construction.

Furthermore, Schuetz worked with the Los Angeles Housing Authority to prioritize housing voucher holders for these units, ensuring that they went to families most in need. She also facilitated partnerships between the city and private developers to finance the preservation and rehabilitation of these buildings.

Her work serves as a powerful example of how these strategies can be implemented. By combining historic preservation, policy changes, community development, public program intervention, and public-private partnerships, Schuetz has demonstrated that affordable housing preservation is not only possible but also advantageous in high-cost markets.

Conclusion

In booming markets, the preservation of affordable housing is an imperative task. Through a comprehensive approach, cities can ensure that all residents, regardless of income, have access to affordable, stable housing. Policies such as inclusionary zoning, tax abatement programs, and preservation ordinances can help maintain existing affordable units. Investing in affordable rental housing and Naturally Occurring Affordable Housing can increase the supply of low-cost homes.

The role of community-based organizations in acquiring and maintaining affordable units is crucial, as is the utilization of public programs like the Low-Income Housing Tax Credit program. Furthermore, the potential of historic preservation in providing affordable housing should not be overlooked. Lastly, public-private partnerships can help finance the preservation and rehabilitation of affordable properties.

The journey towards preserving affordable housing in high opportunity, high cost cities might seem daunting. However, as Jenny Schuetz’s work in Los Angeles shows, it is a challenge that can be met. The strategies outlined in this article provide a roadmap to ensuring housing affordability, where all residents can afford to live and thrive in their cities.