Academic journal article Cityscape

Preserving and Expanding Affordability in Neighborhoods Experiencing Rising Rents and Property Values

Academic journal article Cityscape

Preserving and Expanding Affordability in Neighborhoods Experiencing Rising Rents and Property Values

Article excerpt

Introduction

Many urban neighborhoods are experiencing increases in rents and property values associated with an influx of higher-income households. This phenomenon (sometimes referred to as "gentrification") can be a double-edged sword. On the one hand, it may contribute to the revitalization of older deteriorated buildings; generate increased property taxes for cities, helping to shore up city finances; and contribute to greater diversity in terms of income, race, and ethnicity. On the other hand, many critics are concerned that the rent and property value increases may push out long-time residents of these neighborhoods, undermining the full potential of these changes to enhance community diversity, disrupting longstanding cultural traditions, and depriving long-term residents of the health, educational, and quality-of-life benefits of living in revitalized neighborhoods.

The ideal solution to the challenge of rapidly rising rents would preserve opportunities for low- and moderate-income households to continue to afford to live in these neighborhoods even as higherincome households move in, increasing income, expanding racial and ethnic diversity. To achieve this outcome, cities and counties will need to be proactive in adopting local housing strategies designed to preserve and expand the availability of affordable housing in these neighborhoods. A successful strategy generally will require the adoption of multiple policies or programs to address different aspects of the challenge and achieve a larger cumulative impact as well as advance planning to anticipate areas where rising rents and home prices are likely so the needed policies can be adopted early in the trajectory of neighborhood change. Communities will need to coordinate the actions of multiple local government agencies and build close working partnerships with many nongovernmental actors, including nonprofit organizations and for-profit developers, community development corporations, advocates, and others.

To address this challenge, local governments need to focus on six housing strategy components-

1. Preservation. Preserve existing affordable rental units.

2. Protection. Help long-time residents who wish to stay in the neighborhood.

3. Inclusion. Ensure that a share of new development is affordable.

4. Revenue generation. Harness growth to expand financial resources for affordable housing.

5. Incentives. Create incentives for developers of affordable housing.

6. Property acquisition. Facilitate the acquisition of sites for affordable housing.

In general, these policies will be most useful in cities and counties where strong regional economies are creating an increased demand for housing in urban areas that is driving up rents and home prices. Many of these high-cost communities are experiencing rent and home price increases throughout (or in large parts of) the city or county. These policies also may be useful, however, to address rising rents and home prices in particular neighborhoods within cities or counties that are otherwise considered to have a weak or stable housing market.

This article provides a broad overview of housing policies and programs that address each of these housing strategy components, followed by a brief discussion of cross-cutting issues that will need to be addressed as part of a comprehensive strategy for preserving and expanding affordability in these neighborhoods.

Housing Strategy Components

1.Preservation: Preserve Existing Affordable Rental Units

The first component of an overall strategy in this area aims to preserve the affordability of existing affordable rental units despite increases in surrounding property values and rents. These units fall into two main categories: (1) rent-restricted rental units and (2) unsubsidized but affordable units. Federal and state public housing units may also need preservation, although the challenges are somewhat different and so are addressed in the "Preserving Public Housing" section as a third category. …

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