Preserving Existing Affordable Housing

Preserving Existing Affordable Housing

It is almost always cheaper to invest in preserving existing affordable housing than it is to have to replace that housing by building new.  Although this concept is readily accepted by most, the importance of preservation is too often overlooked by public bodies.

Retaining and protecting what we have takes several forms.  Cities commonly provide programs to finance home repairs and remodeling for low and moderate income homeowners.  However, in some circumstances, providing assistance to multifamily rental properties at risk of deterioration might also be warranted.  In some cases, cities see declining conditions in rental housing not as an indicator of a need for investment, but as an indicator of the need to remove the housing.  In a regional market where the gap between the supply of affordable housing and the demand is so great, the region cannot afford to be removing badly needed units.  In those extreme circumstances where apartments must be torn down, a city should adopt a formal policy committing to full replacement of each affordable unit.  The City of Brooklyn Park, for example, recently adopted such a policy.

Physical deterioration is not the only threat to affordable housing; the loss of the affordability of housing is equally a danger.  One way this happens is when private owners of government assisted housing decide to prepay their government regulated mortgages, or to "opt-out" of the section 8 program (in the case of project-based section 8, where the subsidy remains with the building).  Although the tenants in those buildings are usually protected by being provided with Section 8 vouchers, in the long run the building converts to market rate housing and the affordable housing supply is diminished.  Recognizing that long term threat to the supply, tenants in these buildings will frequently approach their local government for assistance in their campaign to persuade their owner to remain in the program.  In the past, there have been times where city assistance has led to the retention of such properties, and in these cases cities should carefully examine if they can play a constructive role.

Affordability can also disappear from affordable for sale housing.  Often public bodies will invest in first time homebuyer programs only to see those properties escalate in value as they turn over, leading to something of a windfall for the initial buyer but a loss of all affordability for subsequent buyers.  Some communities have established community land trusts as a strategy to ensure longer term affordability for these properties.

An affordable housing resource that the general public frequently overlooks is manufactured home parks.  Homes in such parks are quite affordable, and in fact constitute the largest source of affordable housing in the state.  Not only that, they provide a form of home ownership (of the home, if not the land underneath), and do not receive a penny of public subsidy.  The problem is that the parks are typically not owned by the residents but by investor-owners and when these parks sit on land that is growing increasing valuable, they are at risk of closure and displacement of residents.  This risk is acute in many of our rapidly developing suburbs where these parks have often served as the principal source of low cost housing in these communities.

Cities need to recognize these parks for the valuable resource that they are, and commit to policies to make sure they remain that way.  One way is to administer programs that provide loan or grant assistance to park residents so they may fix up or upgrade their homes.  Another way is to send a clear message to the park owner that the city sees the park as a key asset the community wants to retain.  In some cases, park owners may be interested in selling the park for possible redevelopment.  This may trigger a legal right on behalf of the residents to match the purchase price and buy the park themselves.  A preservation purchase of this kind is in the community interest, and the city may be able to facilitate a resident purchase through financial or other assistance. 



Housing Preservation Project, 2007
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