The Relevancy Project: PRESERVING AFFORDABLE HOUSING

Read the compiled findings from The Relevancy Project in Landmarks Illinois’ November 2023 publication, “The Relevancy Guidebook: How We Can Transform the Future of Preservation.”

Tiger Senior Apartments, Paris, Illinois. The Laborers’ Home Development Corporation converted the former Paris Senior High School into a 42-unit affordable housing complex for seniors 55 and older. Paris, a community of 8,600 in eastern Illinois, was in need of affordable housing so that community elders could age in place. Several residents are delighted to live in their former high school classroom. Photo courtesy WJW Architects PC. Photo by J.L. Jordan Photography.

AUGUST 18, 2022
BY BONNIE MCDONALD, PRESIDENT & CEO, LANDMARKS ILLINOIS

The Relevancy Project’s purpose is to make preservation more relevant to more people by identifying what they value, the issues surrounding what they value and providing applicable solutions. Preservation practice can shift away from its focus on the aesthetics of historic places to contributing effective solutions to a community’s challenges. Helping to provide housing is perhaps our greatest opportunity to be more relevant. This blog is a high-level introduction to the intersection of affordable housing and preservation.

HOUSING AFFORDABILITY IS A UNIVERSAL ISSUE

A majority of Americans see housing affordability as a problem.1 The U.S. Department of Housing and Urban Development (HUD) defines an affordable place to live as one where housing costs are below 30 percent of a person’s income.2 Rural (40%), suburban (47%) and urban (63%) residents believe the lack of affordable housing is a major problem. Concerns about housing access are nearly universal, despite geographic, demographic and economic differences.3

The United States has an undersupply of all housing types, with the least available inventory at low-income price points.4 A Harvard University study reported that, “it could take a decade of record-level homebuilding to meaningfully increase affordability” for homebuyers.5 Home purchase price growth has hit a record high. 6 The National Association of Realtors® found in its “2022 Obstacles to Home Buying Report” that “the lack of affordable homes is the top obstacle holding back potential home buyers of all races.”7 Investors are 28 percent of homebuyers, often purchasing homes in the market’s lower-third price point. They rent or sell them for profit, further decreasing the affordable supply.8

Lack of affordable rental housing is affecting under-resourced renters, as well. According to the National Low Income Housing Coalition, extremely low-income renters face a lack of affordable housing access in every state and major metropolitan area.9 New apartments are priced for high-income renters, while the low-income supply dwindles.10 Almost half of all renters spent more than 30% of their income on housing in 2018 and within this group, 25 percent spent more than half their income.

Housing insecurity and homelessness result from a lack of affordable housing. The National Alliance to End Homelessness reported that over 580,000 people were experiencing homelessness in America as of January 2020.12 In 2019, an estimated 3.7 million practiced “doubling up:” living with other families or people due to housing insecurity. 13

These statistics show that preservation could be more relevant to more people if we help preserve and create more affordable housing.

PRESERVATION CAN INCREASE HOUSING SUPPLY

Historic buildings of all types can be successful housing conversions: schools, warehouses, large office buildings, storefront retail, sacred places, fraternal buildings, hospitals and more. A building’s original use is often obsolete due to changing demographic, economic or social circumstances, leaving an underperforming, unmaintained and/or vacant building. Adaptively reusing existing buildings for housing can increase the overall supply by converting places not originally designed for residential to this use.14 In Los Angeles, a groundbreaking 1999 Adaptive Reuse Ordinance has helped create 46,000 housing units in downtown and its surrounding neighborhoods.15 A 2022 RAND Corporation study on Los Angeles County’s critical housing shortage found that adaptive reuse could provide between 9% – 14% of the county’s next-eight-years housing need.16

Preservationists can help this process by introducing developers to properties that are good candidates for housing conversion. At Landmarks Illinois our annual awards program regularly introduces us to housing developers who adaptively reuse existing buildings, oftentimes for affordable apartments. We connect these developers to advocates and municipalities with buildings that can be converted to housing.17 We can also talk up the benefits of adaptive reuse to developers. Reusing existing buildings reuses existing infrastructure, thereby cutting down on the time and cost for municipal approvals and permitting.18 The construction process can begin and end more quickly than new construction.19

PRESERVATION CAN INCREASE AND PROTECT AFFORDABLE HOUSING SUPPLY

The preservation field can point developers to adaptive reuse examples that created affordable housing units. According to Yardi Matrix, a commercial real estate data firm, 778 older commercial buildings were converted to apartments between 2010-2020 with 65% of those 96,500 housing units aimed at low-to-middle income renters.20 HUD makes a case for preservation by reusing existing affordable rental housing properties, though their use of the term “preservation” is about maintenance and reinvestment, not restoration:

Pairing the Federal Historic Preservation Tax Credit (FHTC) and HUD’s Low-Income Housing Tax Credit (LIHTC) incentivizes housing rehabilitation and creation. The FHTC incentivized the rehabilitation or creation of 549,005 housing units between 1977-2016.22 As of Fiscal Year 2021, 185,525 of these units were low- to moderate-income rental, though it is not clear how many were created versus rehabilitated.23 The FHTC renovated or created just 7,220 low- to moderate-income housing units in Fiscal Year 2021 when there is a shortage of 7 million affordable rental units. 24 / 25 Our field is exploring how we can help to reduce this shortage.26

Preserving existing public housing prevents this shortage from increasing. Public housing is government-built, affordable rental housing originally intended for residents making 80% or less of area median income.27 There are almost 930,000 public housing units in the United States housing over 1.7 million people. 28 The 1991 American Housing Survey found that 39% of public housing units were built after 1970, 36% between 1950 and 1969, and 25% prior to 1950. If these buildings are still standing, the newest would be 52 years old and the oldest, 85 years.29 Since the mid-1990s, housing authorities have demolished over 200,000 units that were classified “obsolete,” due to the original lack of quality construction for some of these buildings, as well as deferred capital maintenance.30 Most public housing buildings that are between 50-to-90 years of age need substantial reinvestment. Preservationists can join residents, activists and housing authorities in evaluating if and how historic public housing meets residents’ needs and wants. Public housing’s future is about more than the building: it is about the future of peoples’ homes, lives, communities and more. Conversations have layered complexities that engage memory and experiences around identity, justice and power, so entering the discussion needs to be done thoughtfully and after building trust with partners.

PROTECTING NATURALLY OCCURRING AFFORDABLE HOUSING

Subsidized rental units represent a small percentage of affordable housing in the U.S. Eighty percent of all affordable rentals in large markets and 75% of affordable units nationwide are referred to as “naturally occurring affordable housing,” or NOAH, that is considered broadly affordable, but remains unsubsidized by any federal program. 31 This type of housing is often small- or mid-sized rental buildings, over 35 years old, that are particularly vulnerable because investors purchase them at low cost, renovate and then raise rents.32 Duplexes and triplexes may also be subject to de-conversion from multi-family rental to single-family housing, or be demolished to make way for a single-family home. Of the 12 million affordable housing units in the U.S., 9 million are naturally occurring.33 Low-income people of color are the predominant NOAH renters.34 Developing preservation strategies to maintain NOAH properties and to protect their affordability would make preservation relevant to the estimated 23 million people living in these buildings.35

NOAH also pertains to affordable homeownership. Here again, preservation has an important role to play in working with homeowners to preserve affordability, help provide maintenance and hazardous material remediation funding and prevent displacement. Municipalities and nonprofits have applied land use and real estate tools such as accessory dwelling units (ADUs), land trusts and housing cooperatives to preserve affordable homeownership. See the “Housing-Related Models” section below for links to these programs.

ROADBLOCKS TO OVERCOME

There are several roadblocks to increasing housing through preservation, including, but not limited to:

  • Some residents in under-resourced or marginalized communities, as well as Yes In My Back Yard (YIMBY) advocates, believe that historic designation causes or contributes to gentrification, displacement of people of color and low-income residents and prevents affordable housing construction. While we can point to studies that dispel these claims, communities will reject preservation based on this perception. Read Dan Bertolet’s articles citing these arguments in the “Further Reading” section below. Considerable work is needed to study historic preservation, affordability, gentrification and displacement, build constructive partnerships with local YIMBY chapters and find collaborative means to create more affordable housing in historic communities, including conversations about increasing neighborhood density.
  • Municipal zoning and building codes can make it difficult to convert historic buildings to housing. Follow the work of Cornell law professor Sara Bronin, founder of Desegregate CT, for messaging, model language and other programs to emulate. (Find more about Sara Bronin’s work here: https://sarabronin.com/)
  • More financial resources are needed to maintain or purchase NOAH buildings. Owners and renters, affordable and market rate, need resources for hazardous material mitigation or energy efficiency improvements that work in harmony with historic material.
  • Home maintenance and repairs are financially burdensome for low-income homeowners. A 2019 HUD study found that low-income homeowners spend little on maintaining and improving their homes. When they do, it represents three times as much of their income as high-income owners and generally goes to maintenance and disaster repair.36 We need to work with partners to create accessible, affordable maintenance and repair funds for low-to-middle income property owners.
  • The perception that historic preservation is always more costly than new construction is a significant roadblock. We can provide relevant data that demonstrates when preservation costs less than new construction, as well as first-person testimonials from developers and community development corporations.
  • The value of the FHTC decreases when paired with the LIHTC. Advocate for the Historic Tax Credit Growth and Opportunity Act to become federal law, which would make it easier to use with the LIHTC. (Find a fact sheet here: https://tinyurl.com/yrp5kcmm)

Clearing these and other roadblocks will take input, knowledge, planning and collective action. We will need to forge partnerships, collect and analyze data, develop case studies, create financial tools and change policy at the federal, state and local levels. Most of all, we can expect changing practices and policies to take considerable focus, effort and time. Increasing housing units presents an opportunity to meet a widespread, nearly universal need. You and your organization can make the choice to put a greater focus on housing as a way to grow your relevance.

HOUSING-RELATED MODELS

POLICY TOOLS
LAND USE TOOLS
  • Detroit Land Bank Authority Rehabbed & Ready Program (Detroit, MI) – In Detroit, where home values are less than the cost of required rehab work, it can be difficult to finance repairs. The Rehabbed & Ready program was developed to renovate and sell homes for market value in order to bridge the gap between home value and repair expenses. https://buildingdetroit.org/rehabbed-ready
  • Greater Boston Community Land Trust Network (Boston, MA) – The Greater Boston Community Land Trust Network supports current and emerging community land trusts (CLTs) for resident-led planning and long-term, collective control of land in and around Boston. The Network is committed to removing land from the speculative market and putting it into the hands of the community for use in permanently affordable housing, economic development, urban agriculture, and open space.
    https://www.dsni.org/greater-boston-community-network
  • Here to Stay Community Land Trust (Chicago, IL) – Here to Stay is a homeownership model for moderate-income, long time Logan Square/Avondale/Hermosa residents who want to stay in their community. It is an anti-displacement effort created by neighbors. Your purchase price is more affordable because the land trust is deeply discounting the sales price of the property. https://www.heretostayclt.org/
  • Townsite Community Land Trust (Flagstaff, AZ) – Promoting historic preservation and community investment with permanently affordable owner-occupied homes. https://townsiteclt.org/
REAL ESTATE TOOLS
  • The Neighborhood Investment Company (Los Angeles, CA) – Nico is a neighborhood investment company that makes it possible for people who love their neighborhood to build a long-term financial stake in their community by investing in local real estate through a low-investment real estate investment trust (REIT). https://mynico.com/
  • Owe’neh Bupingeh Pueblo Restoration Project by the Ohkay Owingeh Housing Authority (Ohkay Owingeh, NM) – The housing authority is restoring the 700-year-old historic Pueblo, which is the tribe’s spiritual center and is of vital importance to the preservation of the Ohkay Owingeh cultural heritage. Through the Owe’neh Bupingeh Rehabilitation Program, the Pueblo is once again a vibrant, thriving residential area. Ohkay Owingeh is proud of the Pueblo’s history and heritage, and is committed to revitalizing its sacred core through knowledge, conservation, rehabilitation and, as appropriate, new construction. The rebirth of the plazas honors traditional community values and identity while linking the past to the present.
    https://ohkayowingehhousingauthority.com/owe-neh-bupingeh-restoration-project/
  • Pilsen Housing Cooperative (Chicago, IL) – The Pilsen Housing Cooperative is a limited-equity, scattered-site housing cooperative for longtime residents of Pilsen. The co-op is a stand against gentrification and displacement. It is an expansion of home ownership by longtime Pilsen residents, and a concrete manifestation of the strength of the community. https://www.pilsenhousingcoop.org/
FINANCIAL TOOLS
  • Funding to purchase Naturally Occurring Affordable Housing (NOAH) – An article evaluating three funds: The NOAH Impact Fund; The Housing Partnership Equity Trust; and The Washington Housing Initiative Impact Pool.
    https://shelterforce.org/2020/07/30/funding-to-purchase-naturally-occurring-affordable-housing/
  • Mezzanine Debt Loan program (Chicago, IL) – A Community Investment Corporation (CIC) program offering low-cost, flexible financing options for developers looking to purchase or refinance existing rental properties in higher-cost markets.
    https://www.cicchicago.com/loans/#mezzanine-debt
  • Neighborhood Homes Investment Act Proposal – The Neighborhood Homes Investment Act (NHIA) is a federal proposal to break this stalemate. NHIA would offer tax credits to attract private investment for building and rehabilitating owner-occupied homes, creating a pathway to neighborhood stability through sustainable homeownership. https://neighborhoodhomesinvestmentact.org/proposal
  • Small Building Program (Washington, D.C.) – Department of Housing and Community Development’s (DHCD) Small Buildings Program (SBP) will provide funds for limited systems replacement and other key repairs to eligible property owners of affordable housing of five (5) to twenty (20) units. Repairs are expected to improve sub-standard housing conditions, including safety and environmental hazards in the District. https://dhcd.dc.gov/page/small-building-program
  • TIF Multifamily Purchase Rehab program (Chicago, IL) – A Community Investment Corporation (CIC) grant program, administered for the City of Chicago, to stabilize blocks by assisting private developers with the purchase and improvement of vacant and occupied rental buildings within designated tax increment financing (TIF) districts. https://www.cicchicago.com/wp-content/uploads/2022/01/CIC-TIF-Purchase-Rehab-Program-Description.pdf

YOUR INPUT IS VITAL

Your thoughts on this and forthcoming topics are not only welcomed, they’re imperative to ensuring this project is inclusive, with well-considered outcomes. So post away on Landmarks Illinois’ Facebook and Twitter feeds and my  LinkedIn page (blog comments are not enabled)! I’ll collect and consider your comments to inform future blog posts and the project’s outcomes published in the forthcoming Relevancy Guidebook to the U.S. Preservation Movement (working title).

DISCUSSION QUESTIONS

  • Do you believe that housing is a human right? Should everyone be entitled to shelter?
  • Should our personal beliefs and morals influence our professional actions?
  • Do you see preservation connecting more deeply with housing access in your community?
  • Is working on housing a good fit for your skills, resources and capacity?
  • Who could you partner with to increase your housing impact? What value can you add?
  • Are there places in your community that could be reused as housing? What would you need to move a housing reuse forward?

STAY TUNED FOR BLOG POST #7: MITIGATING CLIMATE CHANGE THROUGH PRESERVATION

FURTHER READING ON HOUSING



1A total of 49% of Americans believe affordable housing access is a major problem where they live and another 36% say that it is a minor problem. Schaeffer, Katherine. “A growing share of Americans say affordable housing is a major problem where they live.” Pew Research Center, January 18, 2022. Accessed July 30, 2022. https://www.pewresearch.org/fact-tank/2022/01/18/a-growing-share-of-americans-say-affordable-housing-is-a-major-problem-where-they-live/
2“Defining Housing Affordability.” U.S. Department of Housing and Urban Development, August 14, 2017. Accessed August 14, 2022. https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html
3 Housing markets respond to the economic principles of supply and demand. “Hot” markets are those where demand outstrips supply, resulting in increased housing prices. “Cooling” markets are formerly “hot” markets where people are leaving to find more affordable housing choices. “Cool” markets are where job losses, depopulation and aging or missing infrastructure result in greater supply than demand, but where maintained and improved property can be in low supply. Hot and cool housing markets can be present within the same community.
4 Habitat for Humanity. “2022 State of the Nation’s Housing Report.” Undated webpage. Accessed July 30, 2022. https://www.habitat.org/costofhome/2022-state-nations-housing-report-lack-affordable-housing< 5 Ibid.
6Joint Center for Housing Studies of Harvard University. “State of the Nation’s Housing 2022.” The President and Fellows of Harvard College, 2022. 9. Accessed July 30, 2022.

7National Association of Realtors®. “NAR Study Shows Lack of Affordable Housing Biggest Obstacle to Home Buying.” April 12, 2022. Accessed July 30, 2022. https://www.nar.realtor/newsroom/nar-study-shows-lack-of-affordable-housing-biggest-obstacle-to-home-buying
8Habitat for Humanity.
9 Habitat for Humanity.
10Joint Center for Housing Studies of Harvard University. “America’s Rental Housing 2020.” The President and Fellows of Harvard College, 2020. 2. Accessed July 30, 2022. https://www.jchs.harvard.edu/sites/default/files/Harvard_JCHS_Americas_Rental_Housing_2020.pdf
12National Alliance to End Homelessness. “State of Homelessness: 2021 Edition.” Undated webpage. Accessed July 30, 2022. https://endhomelessness.org/homelessness-in-america/homelessness-statistics/state-of-homelessness-2021/
13Ibid.
14This analysis assumes that no existing housing was demolished in the process and that a higher-density residential building was not proposed for the site.
15Walk-Morris, Tatiana. “How Adaptive Reuse Can Help Solve the Housing Crisis.” American Planning Association, May 1, 2021. Accessed August 13, 2022. https://www.planning.org/planning/2021/spring/how-adaptive-reuse-can-help-solve-the-housing-crisis/
16Ogilvie, Jessica P. “Why Underused Hotels, Motels Could Be The Faster Path To Easing L.A.’s Affordable Housing Gap.” LAist, April 6, 2022. Accessed August 13, 2022. https://laist.com/news/housing-homelessness/underused-hotels-motels-and-offices-could-help-ease-l-as-housing-strain
17Landmarks Illinois does not solicit for, or charge, a finder’s fee for our services.
18Walk-Morris.
19Miller, Michael. “Adaptive reuse and apartment conversations rethink, revitalize rental housing industry.” National Apartment Association, March 25, 2022. Accessed August 13, 2022. https://www.naahq.org/adaptive-reuse-reaches-record-levels
20tu, Alexandra. “Yesterday’s Factories, Today’s Apartments: Adaptive Reuse Projects at All-Time High in the U.S.” RentCafe, September 30, 2020. Accessed August 13, 2022. https://www.rentcafe.com/blog/apartmentliving/yesterdays-factories-todays-apartments-70-years-of-building-conversions-in-the-u-s/
21“Preserving Affordable Rental Housing: A Snapshot of Growing Need, Current Threats, and Innovative Solutions.” Evidence Matters, U.S. Department of Housing and Urban Development (HUD) Office of Policy Development & Research, Summer 2013. Accessed August 13, 2022. https://www.huduser.gov/portal/periodicals/em/summer13/highlight1.html
22 “Federal Tax Incentives for Rehabilitating Historic Buildings: Statistical Report and Analysis for Fiscal Year 2016.” National Park Service Technical Preservation Services, 3. Accessed on August 18, 2022. https://www.nps.gov/tps/tax-incentives/taxdocs/tax-incentives-2016statistical.pdf (This is the last published FHTC statistical report.)
23“Federal Tax Incentives for Rehabilitating Historic Buildings: Annual Report for Fiscal Year 2021.” Technical Preservation Services, National Park Service, March 2022, 3. Accessed August 14, 2022. https://www.nps.gov/tps/tax-incentives/taxdocs/tax-incentives-2021annual.pdf
24Ibid.
25Aurand, Andrew, et al. “The Gap: A Shortage of Affordable Rental Homes April 2022.” National Low Income Housing Coalition, 2. Accessed August 18, 2022. file:///C:/Users/BMcDonald/Downloads/Gap-Report_2022.pdf
26See “Affordable Housing and Density Issue Brief – Fall 2021,” published by the Preservation Priorities Task Force , a joint project of the National Preservation Partners Network and National Trust for Historic Preservation.
27“HUD’s Public Housing Program.” U.S. Department of Housing and Urban Development, undated. Accessed August 14, 2022. https://www.hud.gov/topics/rental_assistance/phprog
28“Public Housing (PH) Data Dashboard.” U.S. Department of Housing and Urban Development, undated. Accessed August 14, 2022. https://www.hud.gov/program_offices/public_indian_housing/programs/ph/PH_Dashboard
29 “Public Housing: Image Versus Facts.” Office of Policy Development and Research, U.S. Department of Housing and Urban Development, Spring 1995. Accessed August 14, 2022. https://www.huduser.gov/periodicals/ushmc/spring95/spring95.html
30“Policy Basics: Public Housing.” Center on Budget and Policy Priorities, June 16, 2021. Accessed August 14, 2022. https://www.cbpp.org/research/public-housing
31Kling, Steve, Shannon Peloquin, Charles Riesenberg and Jonathan Woetzel. “Preserving the largest and most at-risk supply of affordable housing.” McKinsey & Company, February 23, 2021. Accessed August 7, 2022. https://www.mckinsey.com/industries/public-and-social-sector/our-insights/preserving-the-largest-and-most-at-risk-supply-of-affordable-housing
32 Ibid.
33 Willis, Haisten. “Preserving Affordable Housing.” The Washington Post, March 19, 2020. Accessed August 13, 2022. https://webcache.googleusercontent.com/search?q=cache:0T7CDSiKhX4J:https://www.washingtonpost.com/realestate/the-noah-conundrum-maintaining-the-lifeboat-for-affordable-rental-housing/2020/03/18/e3e18aa6-12ba-11ea-bf62-eadd5d11f559_story.html&cd=17&hl=en&ct=clnk&gl=us
34Kling.
35U.S. Census data shows that the average household has 2.6 people. Multiply 9 million housing units by household number and that is how I estimated 23 million people living in NOAH. https://www.census.gov/quickfacts/fact/table/US/HCN010217
36 Wedeen, Sophia. “Home Repairs and Updates Pose Considerable Burdens For Low-Income Homeowners.” Joint Center for Housing Studies of Harvard University, June 16, 2022. Accessed August 13, 2022. https://www.jchs.harvard.edu/blog/home-repairs-and-updates-pose-considerable-burdens-lower-income-homeowners


READ THE PDF VERSION

Support our advocacy

Be a voice for the future of our communities by supporting Landmarks Illinois. Our work enhances communities, empowers citizens, promotes local economic development and offers environmentally sound solutions.

Become A Member