10 Ways of Looking at Affordable Housing Preservation
Over half a million affordable homes are lost every year in the United States. The leading causes are deteriorating conditions due to age or neglect and owner renovations to capture significant rent growth.
Adding to the problem is that most new apartments charge high rents. Of the 189,100 new rental homes built between late 2015 and 2016, nearly 85 percent charged luxury rents – i.e., prices in the top 20 percent, according to CoStar Group Inc.
The result is that fewer homes are affordable for low-income renters, a shortage that exacerbates a housing crisis that affects nearly 19 million families. Any serious solution to addressing our country’s affordability challenges must involve increasing supply through both new construction and preserving existing affordable homes.
That’s one of the key reasons why Enterprise recently acquired a portfolio of more than 4,100 affordable homes in the mid-Atlantic. We plan to keep all 43 properties affordable for low-income residents – predominately seniors earning no more than 60 percent of the area median income.
We asked several Enterprise leaders to offer their perspectives on the importance of affordable housing preservation. Here's a roundup of what they said.
David Bowers, Vice President and Market Leader, Mid-Atlantic:
“Families. Parents. Children. Neighbors. People. With every home that is affordable to low-income households that Enterprise helps preserve we are helping make life more stable and secure for real people with real names, real stories and real lives. People, not statistics – is what the effort is all about. In the mid-Atlantic region – one of the most expensive rental markets in the country – the need to preserve housing and opportunity for current and future residents is critical for quality of life and the region’s economic competitiveness.”
Lori Chatman, President, Enterprise Community Loan Fund:
“The number of people looking for an affordable place to live will continue to grow over the coming years and decades; while building new homes will be important, protecting and improving the affordable homes we already have is critical. Preservation is the most cost-effective method for providing affordable housing, not to mention the stability and prosperity it provides for low-income families and seniors because it allows them to stay in their homes and communities.”
Chickie Grayson, President & CEO, Enterprise Homes, Inc.:
“The preservation of affordable housing for seniors in particular is critical since many states do not have senior housing as a priority and are not currently funding it. As a result, very little production has occurred over the past several years. The population of people 65 and older increased from 36.6 million in 2005 to 47.8 million in 2015 – and is projected to more than double to 98 million in 2060. We need to do everything we can to enable people to age in place with dignity and grace – in a home they can afford.”
Rich Gross, Vice President and Market Leader, Northern California:
"In the San Francisco Bay Area, we are faced with the country’s most severe housing crisis and we know that there is no way we can build enough new affordable housing to get us out of this crisis. Our diverse neighborhoods are changing rapidly as gentrification and displacement become more commonplace. Preservation of existing affordable housing is a critical part of the solution. Guaranteeing long-term affordability to residents allows families to thrive in neighborhoods and preserve their ties to their neighbors, schools, jobs and health care."
Christopher Herrmann, Vice President, Conventional Equity:
“Preservation of existing affordable housing plays a critical role in addressing the rental housing crisis in our country. We know that it is far more cost-effective to save an existing affordable home than it is to build a new one. That’s why Enterprise is so focused on developing innovative debt and equity products to help support our partners’ preservation efforts in local communities across the country.”
Scott Hoekman, Senior Vice President and Chief Credit Officer; Senior Advisor, Public Policy; President and CEO, Enterprise Community Asset Management, Inc.:
“Developing new affordable homes is crucial in meeting a vast and growing need. But producing new homes won’t get us far if we’re simultaneously losing existing affordable homes to market conversion. That’s why Enterprise is so committed to long-term preservation – and our commitment is to preserve affordable homes for the long-term, so they remain a community resource for the residents they serve.”
Tiffany Manuel, Vice President, Knowledge, Impact & Strategy:
“Despite clear evidence that affordable housing is a critical foundation for stable families and communities, we lose more than 125,000 units of publicly subsidized affordable rental housing across the nation each year. As affordable housing disappears from a community, it can have disastrous consequences. Many families are uprooted or displaced, making it difficult for them to find and keep jobs or for their children to succeed in school. Businesses, too, are deeply impacted – increasing the difficulty of attracting and retaining talent, putting a local economy at a competitive disadvantage. Thus, for Enterprise, the effort to preserve affordable housing today is a smart investment in our future – the future of our children, our communities and our economy.”
Marion McFadden, Vice President, Public Policy:
“From preservation of historic properties to rehabilitation of generation-old buildings to simple refinancing that ensures that affordable apartments aren’t lost to the market in gentrifying areas, we make investments to ensure that communities retain their core identify. The many benefits of purely private-market growth and change are accompanied by federal, state, local and nonprofit resources that try to ensure that prosperity can be shared. The human aspect is that good policy protects existing residents, who can include low-income retirees and employees of local businesses, schools and hospitals.”
Benjamin Nichols, Vice President, National Initiatives:
“Aside from keeping homes affordable, the preservation of affordable housing protects best practices and other lessons that can be leveraged across, and help sustain, other affordable housing developments for the long term. Another key benefit of preservation is that the developments are already a part of the community. Where possible, keeping them green, healthy, resilient and affordable makes the community stronger, more vibrant and appealing.”
Charlie Werhane, President & CEO, Enterprise Community Investment:
“Nearly 19 million people spend more than half of their income just to keep a roof over their heads. Preserving affordable homes, particularly for low-income renters, is one of the primary tools at our disposal for ending the country’s housing insecurity crisis.”