Affordable Rental Units Preserved With MacArthur Support

Posted under Industry News on March 2, 2009

Seizing the opportunity to make needed long-term investments in the face of a weak economy, 12 states and cities are launching innovative projects to preserve more than 70,000 affordable rental homes.

The new projects will assist military families in Maryland, seniors in rural Iowa and Vermont, low-wage workers in Florida and Oregon, and people who have been homeless in Los Angeles. They will promote energy efficiency in Pennsylvania, save distressed buildings in Minnesota, improve management of rental housing in Washington State, and ensure that rental homes are available in gentrifying areas near public transit in Denver.

With the stock of affordable rental housing disappearing at an alarming rate, MacArthur’s $32.5 million investment—$9.5 million in grants and an additional $23 million in low-interest loans—will leverage more than $147 million in other funding. The news was formally announced February 26 in a conference call with media, and federal, state, and local housing officials across the country.

Rental housing is “definitely critical to part of the housing solution,” said Secy. Shaun Donovan Thursday, adding that the Department of Housing and Urban Development under an Obama administration would be re-tooled: “We won’t allow HUD to be an impediment.”

State and local governments in 40 states competed for MacArthur’s support, indicating broad, national interest in preserving affordable rental housing. The Foundation’s funding for these 12 projects is a part of MacArthur’s Window of Opportunity initiative, a $150 million, 10-year effort to preserve affordable rental homes across the nation. By investing in public sector initiatives such as these, the Foundation hopes to help create a wave of policy reform in cities and states that will make it possible to preserve one million homes this decade.

Examples of the 12 creative state and local projects include:

  • Denver—The City and County will establish a new loan fund for transit-oriented development that preserves affordable rental housing near existing and planned regional public transit stations. This investment will also help residents access job centers throughout the region. The Denver metropolitan area is undergoing the largest expansion in the nation of its public transit system.
  • Maryland—Military base closures and the related relocation of 40,000 households will increase pressure on rents in eight counties. The State will ensure that rental housing preservation is a key element of the region’s response to the base closures by identifying preservation opportunities and creating a compact among state and local housing leaders to align efforts.
  • Oregon & Portland—The City and State are expanding the Oregon Housing Acquisition Fund, a revolving loan fund created to finance the purchase of at-risk properties until permanent financing is available. Over the next five years, federal subsidy contracts will expire on 80 percent of Oregon’s privately-owned rental housing. Nearly one-quarter of these homes are located in Portland, where more than 2,700 families are waiting for rental assistance.
  • Pennsylvania—In the largest such effort in the nation, Pennsylvania will conduct comprehensive energy audits to determine the most appropriate and cost-effective improvements for increasing energy efficiency in rental homes. Results will help reduce anticipated 40 to 60 percent increases in utility expenses in affordable rental housing for some of Pennsylvania’s neediest families.

Download a summary of all 12 projects.

Donovan told Shelterforce that the long-term affordability of the preserved rental units would be ensured through inclusionary zoning policies, oversight from state and local governments, as well as the implementation of asset management strategies. Erika Poethig, associate director of housing for MacArthur, cited specific examples of long-term affordability in localities like Minnesota, where that state is attempting to develop strategies to create a plan for long-term affordability for housing that has been unsubsidized. “Each and every place is different,” she said, adding that different approaches are taken depending on the type of rental properties involved. “There is not one blueprint that covers all 12 places,” she said.

Some of MacArthur’s $32.5 million investment is targeted to energy efficient loan funds that support projects to retrofit units with more efficient infrastructure.

Poethig said a “full-scale” evaluation will be put into effect to monitor MacArthur’s initiative, but added that “a lot of these jurisdictions were proposed to us to support new kinds of data systems that will enable them to monitor better.