Seizing the opportunity to make needed long-term investments in the face of a weak economy, 12 states and cities are launching innovative projects to preserve more than 70,000 affordable rental homes.
The new projects will assist military families in Maryland, seniors in rural Iowa and Vermont, low-wage workers in Florida and Oregon, and people who have been homeless in Los Angeles. They will promote energy efficiency in Pennsylvania, save distressed buildings in Minnesota, improve management of rental housing in Washington State, and ensure that rental homes are available in gentrifying areas near public transit in Denver.
With the stock of affordable rental housing disappearing at an alarming rate, MacArthur's $32.5 million investment - $9.5 million in grants and an additional $23 million in low-interest loans - will leverage more than $147 million in other funding. The news was welcomed today by federal, state, and local housing officials across the country.
"These grants have spurred state and local innovation and leadership in the preservation of affordable housing," said U.S. Department of Housing and Urban Development Secretary, Shaun L. Donovan. "At each grantee site, a representative of HUD has participated in developing the strategies and aligning efforts. It is my goal to make HUD a strong partner at the state and local level. The MacArthur Foundation should be commended for supporting partnerships across the government, private and nonprofit sectors."
State and local governments in 40 states competed for MacArthur's support, indicating broad, national interest in preserving affordable rental housing. The Foundation's funding for these 12 projects is a part of MacArthur's Window of Opportunity initiative, a $150 million, ten-year effort to preserve affordable rental homes across the nation. By investing in public sector initiatives such as these, the Foundation hopes to help create a wave of policy reform in cities and states that will make it possible to preserve one million homes this decade.
"For many years, the goal of home ownership has been emphasized in the U.S. and as a country we lost sight of the value of rental housing in a balanced national housing policy," said MacArthur President Jonathan Fanton. "The end of the housing bubble and a wave of foreclosures have underscored the importance of affordable rental housing. We now have an opportunity to reset the policy agenda, restore rental housing to its proper place, and reshape the policy environment so that it both encourages rental housing preservation and makes it easier to do. State and local governments are at the forefront of this effort, showcasing innovation and trying fresh approaches."
Almost all Americans are renters at some point in their lives. Today, about one in three households - home to more than 75 million people - rent their homes, a number that is rising because of the foreclosure crisis and overall weak market for home sales. Yet, the supply of affordable rental homes is shrinking. Over the last decade, more than one million affordable rental homes were lost due to demolition, conversion to condominiums, expiring government subsidies, and rapidly rising rents. An additional one million homes are expected to be lost in the decade ahead. For every affordable home built each year, two are lost. This means there are not enough affordable homes for millions of Americans all across the nation, not simply in urban areas.
Now, while housing prices decline, acquiring multi-family rental properties is becoming more affordable, enabling cities and states to use scarce dollars more efficiently and effectively. The average cost to preserve a home is half that of building a new one. Preserving affordable housing also provides a stimulus to local economies. For instance, each job supported or created through affordable housing development in Oregon generates another one and one half jobs, on average.
"We're leveraging our mass transit expansion and ensuring that Denver residents of all income levels have access to affordable housing near these critical transportation corridors," said Denver Mayor John Hickenlooper. "This creates important economic opportunities for our workforce and further strengthens the character and vitality of Denver's neighborhoods."
Examples of the 12 creative state and local projects include -
Denver - The City and County will establish a new loan fund for transit-oriented development that preserves affordable rental housing near existing and planned regional public transit stations. This investment will also help residents access job centers throughout the region. The Denver metropolitan area is undergoing the largest expansion in the nation of its public transit system.
Maryland - Military base closures and the related relocation of 40,000 households will increase pressure on rents in eight counties. The State will ensure that rental housing preservation is a key element of the region's response to the base closures by identifying preservation opportunities and creating a compact among state and local housing leaders to align efforts.
Oregon and Portland - The City and State are expanding the Oregon Housing Acquisition Fund, a revolving loan fund created to finance the purchase of at-risk properties until permanent financing is available. Over the next five years, federal subsidy contracts will expire on 80 percent of Oregon's privately-owned rental housing. Nearly one-quarter of these homes are located in Portland, where more than 2,700 families are waiting for rental assistance.
Pennsylvania - In the largest such effort in the nation, Pennsylvania will conduct comprehensive energy audits to determine the most appropriate and cost-effective improvements for increasing energy efficiency in rental homes. Results will help reduce anticipated 40 to 60 percent increases in utility expenses in affordable rental housing for some of Pennsylvania's neediest families.
A summary of all 12 projects follows this release. Additional information about each project, including photos and videos, is available at www.macfound.org/housing/statelocal. The MacArthur Foundation has a long history of commitment to affordable housing. Last year, the Foundation announced a $68 million investment in foreclosure prevention and mitigation in Chicago. The Foundation also supports a $25 million research program on how housing matters to families and communities. More information is available at www.macfound.org/housing.
The MacArthur Foundation supports creative people and effective institutions committed to building a more just, verdant, and peaceful world. In addition to selecting the MacArthur Fellows, the Foundation works to defend human rights, advance global conservation and security, make cities better places, and understand how technology is affecting children and society. More information is available at www.macfound.org.
Overviews of State and Local Housing Preservation Projects
Denver - The City and County will establish a new loan fund for transit-oriented development that preserves affordable rental housing near existing and planned regional public transit stations. This investment will also help residents access job centers throughout the region. The Denver metropolitan area is undergoing the largest expansion in the nation of its public transit system. Denver is receiving a $250,000 MacArthur grant and a $2 million program-related investment.(1) For additional information, please visit www.macfound.org/housing/denver.
Florida - With the state's rapid growth and available land, Florida's affordable housing focus has been historically on new construction, yet most of these newer units have rents that are not affordable to the lowest income families. To meet the needs of low-wage workers and low-income seniors, the state will provide mission-driven organizations with assistance so that they can preserve properties that provide housing for extremely low-income households and people with special needs. Florida is receiving a $1 million MacArthur grant. For additional information, please visit www.macfound.org/housing/florida.
Iowa - With much of its affordable housing stock more than a quarter-century old, Iowa faces the challenge of an oversupply of affordable housing in some areas where there are declining populations, and an undersupply in some areas that have growing populations. The state will create a comprehensive database of all subsidized properties so that it can allocate scarce resources strategically and recruit developers to preserve affordable rental properties in rural areas of the state. Iowa is receiving a $400,000 MacArthur grant and a $2 million program-related investment. For additional information, please visit www.macfound.org/housing/iowa.
Los Angeles - Nearly one-third of the subsidized housing stock--22,000 units--is at risk of losing its affordability in the next ten years, including Single Room Occupancy (SRO) units that typically serve households most at-risk of homelessness and low wage workers. The City of Los Angeles will align its various governmental agencies and their capital resources to implement a comprehensive preservation strategy, including building the capacity of developers with expertise in operating SROs. Los Angeles is receiving a $1 million MacArthur grant. For additional information, please visit www.macfound.org/housing/losangeles.
Maryland - Military base closures and the related relocation of 25,000 households will increase pressure on rents in eight counties. The State will ensure that rental housing preservation is a key element of the region's response to the base closures by identifying preservation opportunities and creating a Compact among state and local housing leaders to align efforts. Maryland is receiving a $500,000 MacArthur grant and a $4 million program-related investment. For additional information, please visit www.macfound.org/housing/maryland.
Massachusetts - The state has the fifth most expensive rental market in the country with more than 51 percent of renters paying more than 30 percent of their income. Approximately 41,000 units of subsidized rental housing, or nearly 50 percent of the total stock in the state, may lose their affordability in the coming decade. By forming an interagency working group, Massachusetts will coordinate state, federal, and local housing activities to identify and preserve properties at risk of opting out of subsidy contracts, or with physical and financial problems. Massachusetts is receiving a $1 million MacArthur grant and a $3.5 million program-related investment. For additional information, please visit www.macfound.org/housing/massachusetts.
Minnesota - The state will enhance its system for detecting properties at risk of losing their affordability in order to direct assistance and new funding towards preserving these affordable rental homes. Over the next ten years, 52,000 units of subsidized rental housing in Minnesota, nearly two-thirds of the total stock in the state, are at risk of being lost as subsidy contracts expire, properties physically deteriorate and financial pressures increase. Minnesota is receiving a $750,000 MacArthur grant and a $1.5 million program-related investment. For additional information, please visit www.macfound.org/housing/minnesota.
Ohio - Ohio has seen a steady increase in demand for affordable rental housing due to an unemployment rate consistently higher than the national average and, more recently, the exponential rise in foreclosures throughout the state. To address this growing need, three statewide organizations have partnered to develop a new clearinghouse of information on federally-subsidized properties and coordinate assistance for tenants and affordable housing developers, including a loan fund to help acquire properties. Ohio is receiving a $1 million MacArthur grant and a $4 million program-related investment. For additional information, please visit www.macfound.org/housing/ohio.
Oregon and Portland - The City and State are expanding the Oregon Housing Acquisition Fund, a revolving loan fund created to finance the purchase of at-risk properties until permanent financing is available. Over the next five years, federal subsidy contracts will expire on 80 percent of Oregon's privately-owned rental housing. Nearly one-quarter of these homes are located in Portland, where more than 2,700 families are waiting for rental assistance. Oregon and Portland are receiving a $1 million MacArthur grant and a $4 million program-related investment. For additional information, please visit www.macfound.org/housing/oregon-portland.
Pennsylvania - In the largest such effort in the nation, Pennsylvania will conduct comprehensive energy audits to determine the most appropriate and cost-effective improvements for increasing energy efficiency in rental homes. Results will help reduce anticipated 40 to 60 percent increases in utility expenses in affordable rental housing serving some of Pennsylvania's neediest families. Pennsylvania is receiving a $1 million MacArthur grant. For additional information, please visit www.macfound.org/housing/pennsylvania.
Vermont - With a relatively strong economy, more of the state's workers and seniors face high rents. As the price of heating oil increases, the costs to operate affordable rental housing also are rising. To help mitigate these increased rents, Vermont is engaging in several initiatives to lessen the rental burden on lower income households, including improvements that encourage energy conservation and the use of Medicare and Medicaid to assist in elderly housing. Vermont is receiving a $600,000 MacArthur grant and a $2 million program-related investment. For additional information, please visit www.macfound.org/housing/vermont.
Washington and Seattle - Despite Washington's commitment to preservation and its long-standing dedication to providing affordable housing, some 250,000 households in the state have housing affordability problems with more than 25,000 low-income households in Seattle paying 50 percent or more of their incomes toward rent. The state and city will help nonprofit owners and affordable housing funders implement best practices in asset management to ensure the long-term stewardship of affordable rental homes. Washington and Seattle are receiving a $1 million MacArthur grant. For additional information, please visit www.macfound.org/housing/washington-seattle.
(1) All program-related investments cited will take the form of low-interest loans.
CHICAGO, Feb. 26 /PRNewswire-USNewswire/ --
SOURCE The John D. and Catherine T. MacArthur Foundation