Michael Bodaken National Housing Trust Ohio Preservation Summit: 2010 Affordable Housing...

Michael Bodaken National Housing Trust

Ohio Preservation Summit: 2010

Affordable Housing Preservation: An Historical Perspective

Michael Bodaken, National Housing Trust 2010 Ohio Preservation Summit

National Housing Trust, Affordable Housing Preservation: An Historical Perspective

National Housing Trust

Committed to safeguarding affordable housing.

Only national nonprofit engaged in housing preservation through real estate development, lending and public policy initiatives.

The National Housing Trust: Partners with investors to raise capital to buy and renovate affordable

apartments. Preserved 4,800 affordable apartments.

Lends early money to developers to help them purchase and renovate affordable apartments. Loans have helped preserve 5,000 apartments.

Educates policymakers of the need to dedicate resources towards the revitalization of existing affordable apartments.


What is affordablehousing preservation?

When a privately owned, subsidized rental property is preserved, the owner agrees to keep the property affordable.

This is usually combined with raising new capital to repair the property.

Often the property is transferred to a new owner committed to the long-term affordability of the property.

Galen Terrace Apartments, 82 affordable apartments in Washington, DC preserved by NHT/Enterprise

Galen Terrace before Galen Terrace after


Why Preserve?

3 out of every 10 households rent. It is stable housing, not tenure,

that is key to providing quality of life benefits.

Rehabilitating an existing affordable apartment can cost one-third less than

building a new apartment

Rehabilitating existing housing is easier and faster than building new housing. This means creating new,

well paying jobs sooner.

Stable rental housing is critical to diverse,

healthy communities.

Preserving affordable housing creates jobs

quickly.

Preserving affordable housing is cost effective.


Preserving affordable housing is inherently energy and resource efficient.

Building Reuse. Produces less waste and uses less new materials and energy than new construction.

Infrastructure. Does not require new utility or transportation infrastructure.

Green space. Does not require developing more land.

Household energy use. Integrate green technology and methods into rehabilitation.

Copyright National Trust for Historic Preservation


We lose low-cost rentals at a far higher rate than other housing

Source: State of the Nation’s Housing 2010,

JCHS


400,000 units of USDA rural housing

(Section 515)

What do we want to preserve?


Why is this stock at risk?


Major Preservation Milestones

1980s 1990s 2000s

ELIHPA & LIHPRHA (1987 & 1990)Preservation incentives for HUD assisted housing

Mark to Market(1997)Incentives for Section 8 recapitalization

HOPE VI(1992)Public housing improvement grants

ARRA (Stimulus)(2009)

Full Section 8 funding; Green Retrofits of HUD housing

Low Income Housing Tax Credits

States increasingly dedicate LIHTCs to preservation

Pres. Reform Leg. Introduced(2010)

H.R. 4868; Array of preservation tools and incentives


Major Preservation Tools

Preservation Tool Applicable Properties Description of Tool

Mark-to-Market Programs

FHA-Insured/ Project-based Section 8

Market rents and debt restructuring to finance rehab/recapitalization

Section 236 IRP De-Coupling

Section 236 subsidized mortgages

Ongoing interest reduction payments to finance rehabilitation

LIHTCs/Tax Exempt Bonds

All multifamily affordable housing

Equity for property rehabilitation

Project-based Vouchers Unassisted affordable housing units

Income stream can be leveraged to raise debt

HOME/CDBG Grants All multifamily affordable housing

Eligible activities include funding rehab needs


GREEN $ in Economic Stimulus

Preserves affordable housing

A GREEN investment in privately owned,

federally assisted housing…

creates or retains tens of thousands of

jobslowers energy

costs of vulnerable low-income

households and/or properties

Energy Retrofits of HUD Assisted Housing: $250 M

“Priority investments” in public housing, including energy conservation: $1 B

Weatherization Assistance Prog.: $5 B; 18 States Now Have M/Family component.

State Energy Program and Energy Efficiency and Conservation Block Grant Funds: $6 B


National Issue: Local Challenge

While preservation is a national challenge, the wide variety of local conditions requires a local, special response.

Intervention requires a local understanding of the market, the population being served and level of state and local support.

Many states/cities/counties have resources dedicated to development and/or preservation of affordable housing.

Resources come in the form of soft loans, grants, allocation of tax credits, or tax relief (e.g., real estate tax abatement).


Components of Successful Preservation Strategies


Effective Preservation Strategies:Dedicate LIHTCs to Preservation

Low Income Housing Tax Credits = Largest source of resources for affordable housing.

Administered by each state. States given broad discretion for allocating tax credits.

Affordable housing providers apply. Very competitive process.

State housing agencies are increasingly dedicating resources to preservation

The number of affordable units preserved annually with Low Income Housing Tax

Credits

20,000

64,000

2000 2007


Michael Bodaken

E-mail: [email protected]

Address: 1101 30th St, NW, Suite 400 Washington, DC 20007

Phone: (202) 333-8931

Web: www.nhtinc.org

National Housing Trust

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