The preservation of existing affordable housing stock is fundamental to promoting housing stability and avoiding the displacement of current residents, whether from gentrification and market pressures or physical risks like flooding. While producing new housing can help alleviate the demand for housing that is affordable and available to overburdened and underresourced residents, the pace of new construction usually lags far behind demand. Compared to creating new housing, the preservation of existing housing is also more cost-effective, requiring less resources in time and money. Therefore, prioritizing the preservation of existing housing — and helping its residents to stay in place — will be key to communities seeking to prevent the displacement of current residents and increase local resilience.
As other parts under this goal and the Regional Vision illustrate, creating new housing can also be challenging in the face of regulatory barriers, the rising cost of land, and exclusionary neighborhood mentalities like NIMBYism (or “Not in My Backyard”). Similarly, housing preservation can be complicated by several factors that decrease supply and/or affordability, including:See footnote 1
There are a variety of approaches that can be adopted by local policymakers to advance affordable housing preservation goals. The examples discussed below illustrate strategies that help to incentivize current or future property owners to maintain rents at an affordable rate, and/or empower mission-driven organizations and developers to more easily acquire lower-and moderate-cost properties. A few key approaches that other jurisdictions have adopted to preserve affordable housing include:
In policy discussions, “affordable housing” generally refers to housing that has artificially been made low-cost through government subsidy programs, such as the Low-Income Housing Tax Credits (LIHTC) program.See footnote 2 However, in the United States, the majority of housing that is financially affordable for middle- or sometimes low-income households are non-subsidized housing, also known as naturally occurring affordable housing (NOAH).See footnote 3 While there is no uniform definition for NOAH properties in the housing industry, the term is commonly used to describe privately owned, existing residential properties that are rented out at cheaper rates due to the property’s age and other related characteristics. Common features of NOAH properties include:
Given the prevalence of NOAH properties as the most common type of “affordable” housing in the nation, their preservation can play a significant role in keeping the cost of rent affordable, enabling existing residents to stay in place. Parishes and municipalities can help keep NOAH properties affordable by working by partnering with mission-oriented developers interested in keeping rent affordable for existing residents and reducing the risk of displacement. For example, the City of Charlotte, North Carolina has developed public-private partnership models to ensure the continued existence of (former) NOAH properties.See footnote 8
In 2020, the Charlotte City Council adopted the Pilot Naturally Occurring Affordable Housing (NOAH) Rental Subsidy Program, which was passed with unanimous bipartisan support from Charlotte’s City Council.See footnote 9 Under the Pilot NOAH Program, the City of Charlotte has pledged to work with developers of NOAH properties to preserve long-term affordability for renters earning between 30 and 80 percent AMI, or roughly $25,250 annually for a family of four in Charlotte.See footnote 10 The city helps developers acquire and preserve NOAH properties by providing them with an annual rental subsidy for a minimum of 20 years — or the duration of a deed restriction — at an amount not to exceed the city’s annual property tax bill. The subsidy is then used to cover the difference between what an LMI household can afford and the rent on the unit. In exchange, participating developers and owners (if a property is owned by a separate entity from the developer) agree to affordability restrictions to limit rent growth, and to make units affordable to residents at specific income levels as the units become available through natural turnover.
Several jurisdictions across the country have adopted some form of a “right of first refusal” (or “first right purchase”) law that provides tenants, nonprofits, housing agencies, or other mission-driven organizations with an advance period of time to make a purchase offer for a property. These so-called first refusal rights may be triggered under certain conditions, such as during the sale of a multifamily building, or when affordability restrictions on a building expire and the owner no longer wishes to participate in a subsidy program.See footnote 11
Right of first refusal laws can provide eligible buyers of a property — including tenant associations, nonprofit developers, and local government agencies — with a valuable window of time to organize, produce financing, and make an offer on the property before competing market-rate developers are able to bid. In this way, right of first refusal policies can help prevent the conversion of lower-cost or subsidized housing into market-rate or luxury properties, all the while helping tenants become homeowners. Even if the tenants are ultimately unable to acquire the property, asserting the right of first refusal provides existing residents with additional time to locate new housing or access new housing services, thereby improving their chances of seeking new affordable housing, if not preventing their displacement.
In 1980, the City of Washington, D.C., adopted the nation’s first Tenant Opportunity to Purchase Act (TOPA) to allow tenants the right of first refusal.See footnote 12 Under TOPA, tenants have the right of first refusal to match competing offers for the sale of subsidized housing or private rental housing. Tenants may purchase units individually (transferring them into condos) or collectively as a tenant association and in partnership with a developer. Between 2002 to 2013, TOPA has helped to preserve over 1,400 affordable units in the District.See footnote 13
Like renters, existing homeowners are also at risk of displacement in quickly growing neighborhoods. When home values increase due to population shifts due to flooding and extreme weather, rising demand, and/or physical renovations (among other factors), property taxes will also rise, placing existing residents at risk of displacement if they are unable to afford the increase.
In order to help current homeowners stay in place, localities should consider collaborating with the private sector to support or create programs that provide financial support to homeowners in need of assistance. For example, the Anti-Displacement Tax Fund (ADTF) program in Atlanta, Georgia, provides financial assistance to eligible homeowners to offset the cost of rising property taxes, helping existing residents in some of the fastest-growing neighborhoods of Atlanta to stay-in-place and avoid displacement.See footnote 14 Established in 2017 and funded through private donations, ADTF provides a grant to existing homeowners for up to 20 years. The program specifically targets homeowners who have an annual household income below 100 percent of the area median income (AMI), and have lived in a home within the program’s designated geographic boundaries in the Westside community since at least March 2017. In 2020, Atlanta’s mayor issued an administrative order directed at the city’s development agency to implement a city-wide anti-displacement fund, using $4.6 million of the city’s $28 million housing trust fund to offset the rising cost of property taxes for residents who may experience a heightened risk of displacement.See footnote 15
Credit: City of Austin, Texas, Austin Strategic Housing Blueprint, available at https://www.austintexas.gov/sites/default/files/files/StrategicHousingBlueprint_Final_September_2017.pdf.
Parishes and municipalities could also consider taking other proactive measures. The City of Austin provides one example of taking a comprehensive approach to addressing displacement, using a combination of planning, legal, and funding strategies to help residents stay in place. In 2014, the city created an Anti-Displacement Task Force, which led to a series of recommendations, the development of a Displacement Prevention Strategy, and the creation of the position of Community Displacement Prevention Officer.See footnote 16 Later, the city adopted a Tenant Relocation Assistance ordinance, which requires developers to provide sufficient notice before tenants can be evicted, and directs the city’s Neighborhood Housing and Community Development agency to establish a Developer Fund for Tenant Relocation Assistance. Finally, Austin’s comprehensive transit development plan, Project Connect, includes a $300-million investment toward anti-displacement measures that include transit-oriented development and affordable housing along new routes in the transit plan. To inform the city’s anti-displacement efforts, agencies leading Project Connect partnered with the city’s Department of Housing and Planning to create a series of anti-displacement maps that outline the displacement risk of various neighborhoods along new planned transit routes.
When identifying strategies to preserve existing affordable housing in urban localities, decisionmakers may consider the following considerations and practice tips that apply to one or more of the strategies described above:
These tips are based on priority implementation best practices and considerations most relevant to this specific objective and do not present an exhaustive list for regional and local planners and policymakers. In addition to this objective, decisionmakers should, at a minimum, also refer to Goal Five for crosscutting considerations and practice tips including structuring equitable and inclusive community engagement processes and evaluating opportunities to build public-private-nonprofit-community partnerships.
It is important to acknowledge that every jurisdiction will be starting from a different place and have a unique local context and needs, among other factors. Therefore, these considerations and practice tips could be adopted individually, collectively, or not at all.
The summaries below highlight resources and case studies available in Georgetown Climate Center’s Adaptation Clearinghouse that are relevant to this objective. They illustrate how many of the above benefits, practice tips, and planning, legal, and policy tools were or are being evaluated and used in practice in different jurisdictions. To learn more and navigate to the Adaptation Clearinghouse, click on the “View Resource” buttons.
Endnotes:
1. Dan Emmanuel, Nat’l Low Income Hous. Coal., The Preservation of Affordable Housing (2022), available at View Source. | Back to contentBack to content
2. The Low-Income Housing Tax Credit (LIHTC) program, established under the Tax Reform Act of 1986, is the largest and primary source of federal funding for the construction and rehabilitation of rental housing for low-income tenants. The program provides tax credits to state housing finance agencies, which then determines how to allocate the federal housing tax credits to help finance affordable housing projects for households earning 50 or 60 percent AMI. Ed Gramlich, Nat’l Low Income Hous. Coal., Low Income Housing Tax Credits (2022), available at View Source. | Back to contentBack to content
3. The exact number of NOAH housing is unknown. However, according to 2016 estimates by the real estate and analytics firm CoStar, at least 5.5 million rental units (or 63 percent of the affordable housing stock) across cities in the United States meet the definition of NOAH. CoStar, Naturally Occurring Affordable Housing (Oct. 11, 2016), available at View Source. | Back to contentBack to content
4. What is a Class A, Class B, or Class C property?, Realty Mogul, View Source (last visited Jan. 18, 2022). | Back to contentBack to content
5. Lauren Lindstrom, Here’s how Charlotte could help turn property taxes into rent help, Charlotte Observer (Nov. 2, 2021, 4:35 PM), View Source. | Back to contentBack to content
6. Glossary, U.S. Dep’t of Hous. & Urban Dev., View Source (last visited Jan. 18, 2022). | Back to contentBack to content
7. Naturally Occurring Affordable Housing Benefits Moderate-Income Households, But Not the Poor, Nat’l Low Income Hous. Coal. (Nov. 7, 2016), View Source. | Back to contentBack to content
8. Admittedly, the use of government subsidies to preserve NOAH housing is something of a misnomer, since, by definition, NOAH properties are no longer “naturally occurring” once government subsidies are used to keep rent affordable. Back to contentBack to content
9. Sarafina Wright, City Council votes yes to rental subsidy program for low-income families, QCity Metro (Nov. 9, 2021), View Source. | Back to contentBack to content
10. Britt Clampitt, New subsidy program to help low-income households rent existing affordable housing, Charlottenc.gov (Nov. 18, 2021), View Source. | Back to contentBack to content
11. Meeting the Washington Region’s Future Housing Needs, 46–47. Back to contentBack to content
12. DC Law 3-86, the “Rental Housing Conversion and Sale Act of 1980.” Back to contentBack to content
13. Jenny Reed, DC Fiscal Policy Inst., DC’s First Right Purchase Program Helps to Preserve Affordable Housing and Is One of DC’s Key Anti-Displacement Tools, (Sept. 24, 2013), available at View Source. | Back to contentBack to content
14. Anti-Displacement Tax Fund Fact Sheet, Westside Future Fund (Feb. 6, 2020), View Source. | Back to contentBack to content
15. Atlanta, Ga. Admin. Order No. 2020–42 (Oct. 19, 2020), View Source. | Back to contentBack to content
16. City of Austin, Tex. Anti-Displacement Task Force, Recommendations for Action 8–20 (Nov. 2018), available at View Source. | Back to contentBack to content
17. DC Law § 42–3404.08, “Right of First Refusal.” Back to contentBack to content
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