Buying, Rather than Building, Affordable Housing

demo3-460x250Ottawa   In one city after another we’re getting closer to winning landlord-leasing rules, some rent controls, and inclusionary zoning programs. But, even as victories come closer to hand, the scale of the need for affordable housing is overwhelming our capacity to deliver change. It is not that our eyes are bigger than our stomach anymore. Our stomachs are ravenous and are outstripping the vision we can see with our eyes.

Social Policy does a trade-out with Shelterforce, and I happened to have a recent copy in the stack of things I brought to read on the plane and started flipping through it over breakfast at Carleton University before the beginning of the ACORN Canada national board and annual general meetings. Some of the pieces were a bit out of my league. I wasn’t sure what to make of something called “trauma-informed community building” or TICB, as they proceeded to call it, but I knew I was uncomfortable having poverty medicalized, no matter how good the intentions

On the other hand there was a fascinating piece by Alan Mallach, a senior fellow at the Center for Community Progress and the National Housing Institute that looked at a different direction that the French had taken to developing affordable and mixed-income housing. They were buying it, rather than building it. Mallach discussed the disastrous and well-documented French housing policy in the 1970s when many projects were built on the outskirts of the city and went down from there. The good news, according to Mallach, is that the French learned something from the experience that might teach us something in the United States and Canada as well.

“Now, when French developers build subdivisions or condo projects, nonprofit housing corporations enter into turnkey contracts with the developer to buy blocs of apartments or houses, up to a maximum of 50 percent of the units in the development. Based on those contracts, the nonprofits apply for a package of government loans, grants, and tax breaks so they can both buy the units and make sure they remain affordable. When the projects are completed, the nonprofit buys the units and operates them as affordable rental housing.”

In transferring the French lessons to the USA, Mallach made a couple of comments that made sense in many cities. First, he noted that “most parts of the United States have large inventories of good-quality existing housing available.” If Low Income Housing Tax Credit (LIHTC) funds could be utilized by nonprofit housing developers to buy blocks of these houses either from developers or on the market and convert and manage them as affordable housing, it would both save money, and immeasurably diversity communities, benefiting our families, and potentially serve as a bulwark against blight as well by keeping the housing maintained, viable, and affordable. He also made the case that private sector market developers can create reasonably good quality housing for a price point that is often significantly lower than nonprofit developers utilizing LIHTC monies. Maybe so? Maybe no? I haven’t really looked at that closely, but where I think he is absolutely right is that buying existing housing stock or buying into developments already in motion, drastically reduces the lead time and opportunity cost, meaning more affordable housing is developed now. And, now is when we need it!

This is worth a good look in a lot of places.

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Please enjoy Eric Clapton’s Alabama Woman Blues. Thanks to KABF.

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