Preserving and Expanding Affordable Housing in Neighborhoods with Rising Rents and Home Prices

By Jeffrey Lubell

The new analysis by Raj Chetty, Nathaniel Hendren, and Lawrence Katz of the long-term effects on children of moving to low-poverty neighborhoods has increased awareness of and interest in strategies to help low-income families move to neighborhoods of opportunity. The new Assessment of Fair Housing required by HUD’s proposed rule to affirmatively further fair housing is one vehicle through which this interest may potentially lead to specific action at the local level.  It will be interesting to see whether the new findings also prompt action on housing mobility strategies at the national or state levels.

Some have responded to the new analysis by noting that notwithstanding the benefits for children of moving to low-poverty areas, it simply is not possible for all poor children to do so and that it is therefore imperative that steps be taken to improve the economic mobility and opportunity of poor children where they are currently living.

I would like to make a different point, which is that neighborhoods are not static.  We learned this the hard way during the original Moving to Opportunity demonstration when some of the neighborhoods identified as “low-poverty” based on earlier data had changed by the time families in the experimental group moved there and were no longer as low in poverty as originally projected.  Change happens in the opposite direction as well, and it is this issue – neighborhoods where rents and home prices are rising rapidly, making it difficult for low-income households to afford to stay or move in – that I believe merits significant attention in the policy dialogue.

Even as we work to help poor families with children access neighborhoods of opportunity, and even as we work to improve opportunity in neighborhoods with high rates of poverty, we need to adopt policies to ensure that poor, low- and moderate-income households have access to housing they can afford in neighborhoods where rents and home prices are rising and higher-income households are moving in.  While the “value package” that these neighborhoods offer poor children and families is not the same as that offered by low-poverty neighborhoods, it is nevertheless significant: safer streets, improving retail, and greater diversity in terms of household income, race and ethnicity.  (The jury is still out on schools – will young adults with infants stay as their children age and send their kids to public schools?) 

Other reasons to make these neighborhoods a priority for the preservation and development of affordable housing include a desire to reduce displacement and residential instability and the ability to produce affordable units (or funds for affordable homes) through “value capture” strategies that do not require appropriation of public funds, such as inclusionary zoning, density bonuses, housing trust funds and tax increment financing. Also relevant is the fact that once rents and home prices have risen, the costs of developing affordable housing will rise in turn. So these are essentially once in a generation opportunities to foster mixed-income neighborhoods at relatively low cost.

A new guidebook published by ChangeLab Solutions provides a toolkit for preserving and expanding affordable rental housing in just these types of neighborhoods. The guidebook, which I co-authored together with ChangeLab’s Allison Allbee and Rebecca Johnson, is framed in the language of public health – a key audience for ChangeLab Solutions – but the guidance on housing strategy will be useful for anyone who cares about affordable housing. After describing key strategic considerations for developing a housing policy in neighborhoods with rising rents (pp. 14-16), the guidebook provides a policy toolkit (pp. 17-55) describing housing policies in six areas:

• Preservation: preserving existing affordable rental units
• Protection: helping longtime residents who wish to stay in the neighborhood
• Inclusion: ensuring that a share of new development is affordable
• Revenue generation: harnessing growth to expand financial resources for affordable housing
• Incentives: creating incentives for the development of affordable housing
• Property acquisition: facilitating the acquisition of land for affordable housing

In my view, a comprehensive and effective strategy to preserve and expand affordable housing in neighborhoods with rising rents will require policies in all six of these areas.  The need to combine multiple policies under the jurisdiction of different agencies is one reason why these types of comprehensive strategies are not adopted more widely.

But given the potential benefits for children and others, along with the much lower cost of addressing this issue at the outset – before land values have risen too far – it is essential for communities to get ahead of the curve and begin putting a comprehensive policy framework in place to ensure that households of all incomes can afford to live in these high-demand neighborhoods. 

About "In House," a column by Jeffrey Lubell

Jeffrey Lubell is Director of Housing and Community Initiatives at Abt Global. His column, "In House," focuses on the nexus of housing policy and research. To read Lubell’s previous columns, click here.

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