How can rental housing preservation be used to increase the availability of homes?

The loss of affordable rental homes is a growing challenge in many communities across the country. Appreciating land values, expiring federal subsidies, and deterioration due to age and lack of maintenance are just some of the factors putting existing rental housing at risk. In many cases, the preservation and improvement of existing affordable rental housing is faster, easier, and cheaper than building new rental units from the ground up.

Depending on location and other circumstances, either or both of the following types of preservation may be involved for any given property. Information collection and analysis tools can help communities determine what properties are most at risk of loss and for what reason.

Listen to a podcast from August 2008 with Mike Pitchford, President and CEO of the Community Development and Preservation Corporation (CPDC).  CPDC specializes in the rehabilitation and preservation of affordable rental homes in the greater Washington, DC metropolitan region, and Pitchford talks about the importance -- and environmental benefits -- of preservation. Special guest Angie Skildum, Research and Policy Director at the Family Housing Fund in Minneapolis, MN, joins us to talk about the Interagency Stabilization Group, a collaborative initiative that brings together public and private sector funding partners to facilitate the preservation of affordable rental homes in the Twin Cities.

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. (Click here for an overview of key preservation tools available at the federal level.) For example, most states prioritize the preservation of existing affordable homes in their Qualified Allocation Plans for Low-Income Housing Tax Credits, either by setting aside a portion of 9 percent credits for preservation or by awarding additional points for preservation-related projects. Some cities have also established incentives, such as abatements of property taxes, to encourage owners of rental properties to reinvest in their properties and maintain ongoing affordability. A number of cities have worked with lending institutions to help smaller property owners access affordable capital to modernize their properties and provide funds for larger rehabilitation projects that help maintain the supply of affordable rental homes.

Focusing on smaller owners? Much of the affordable rental stock -- both subsidized and unsubsidized -- is owned by individuals or small businesses that own relatively few rental properties. Local governments can partner with local financial institutions and others to provide owners of smaller rental properties with the skills and resources needed to manage their units profitably. The Community Preservation Corporation in New York City and the Community Investment Corporation in Chicago provide promising models for addressing this aspect of the preservation challenge. Click here to learn more about financing for small property owners.

Click on the links below to learn more about the policies needed to preserve affordable rental homes: Enhance funding for preservation efforts Stabilize and dedicate increased public funding to long-term preservation ownership, expand public-private financing sources for preservation transactions, and adopt innovative tax incentives to strengthen incentives for preservation. Create a policy environment that supports long-term preservation Streamline, coordinate, and align policies and administrative practices to increase the likelihood that affordable rental homes will be preserved and improved, develop more support for long-term preservation owners and make preservation transactions easier, faster and less costly. Improve information collection and policy coordination efforts Collect, standardize, and widely share information about the characteristics of existing affordable rental properties, their residents, and key factors that create a risk of loss, as well as innovative and successful preservation strategies. Protect displaced residents Help residents affected by displacement from affordable rental homes to understand their options, find other housing, and minimize disruption of schooling and social networks. Click here to review case studies of successful preservation projects, or click here to view other resources on preserving affordable rental homes.