What are the challenges to preserving and extending affordability in location-efficient areas?
In many cases, large-scale investments in transit and other infrastructure catalyze increases in the value of properties that are well-located near the new amenities. While this growth can be positive for the overall neighborhood, it can also threaten the continued availability of existing affordable homes — both subsidized and unsubsidized — especially for families with very low incomes. Moreover, while the transit and infrastructure improvements are essentially permanent, contributing to continued increases in housing costs over the long term, the affordability periods for any new units created through conventional affordable housing programs typically expire within 15 to 30 years, at which point property owners have the option to increase rents to market levels, convert rentals to homeownership units, or allow resale restrictions on affordable homeownership units to lapse. Once the affordability periods have lapsed, the cost of replacing the affordable units is often prohibitive, undermining the goal of ensuring that families of all incomes can afford to live in transit-rich, location-efficient areas.
How can states and localities help?
Without specific government action, the sustainable communities we are building today may become out of reach for seniors on a fixed income, working families, and others who rely most on public transit. States and localities can take several steps to preserve and extend affordability near transit centers and
in other location-efficient areas. In addition to programs that stimulate the development of affordable units in new construction, communities with an existing supply of rental homes can implement a preservation strategy that focuses on identifying and preserving existing subsidized and unsubsidized below-market properties and minimizes displacement of current residents. A second and equally important step is to protect substantial public investment in affordable housing by developing and employing mechanisms to ensure assisted rental and ownership housing remains affordable over the long term. Finally, communities can layer additional subsidy assistance onto below-market units created through inclusionary zoning and other programs to bring the rents to levels affordable to very low-income families.
Where are these tools applicable?
Tools that promote the preservation of existing below-market homes and provide long-term affordability are important in any area where housing prices are expected to rise faster than incomes. For example, they are useful in areas near planned or existing transit stations — particularly those undergoing infrastructure upgrades, where housing prices are expected to or have already started to escalate. The cost of developing affordable housing in these areas will often get more and more costly to develop as time goes on. Therefore, whenever possible, these tools should be implemented proactively, before substantial transit improvements have been made or before property values begin to rise at a substantial rate.
Learn more about tools that preserve and extend affordability
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