WASHINGTON, D.C.—I am delighted to serve as a guest editor of AFFORDABLE HOUSING FINANCE, particularly because this issue's focus is on housing preservation, which is so closely aligned with our work at the Department of Housing and Urban Development (HUD).
Preserving affordable housing is essential. Today, there are less than three housing units available for every four very low-income households—and only half the number of units needed for families in extreme poverty. Our existing stock of affordable housing is a critical resource for families who otherwise would not have access to safe, decent places to call home.
Our task is formidable. HUD's portfolio includes more than 22,000 privately owned multifamily properties and more than 1.4 million assisted housing units. Developed up to 40 years ago, many are seeing their original financing supports expire just as major building systems give out, reserves dwindle, and original owners grow fatigued from decades of navigating the federal bureaucracy.
Far too often, HUD has been an obstacle rather than a partner in housing preservation. That is about to change. HUD is working with housing owners, tenants, policy advocates, and members of Congress to develop a flexible menu of preservation programs. We know that what is needed for a troubled property in a challenged neighborhood may be very different from what is needed for a well maintained property in a strong housing market at the end of its mortgage term.
HUD is committed to doing all that we can to provide project owners the tools and resources to renew their aging properties. We can establish after-rehab Sec. 8 rents before the rehab begins, and enable more owners to use residual receipts funds to aid in the rehab effort. HUD can also extend 20-year Sec. 8 contracts to these properties (subject of course to appropriations), providing more certainty for the project's future.
Not all project owners wish to hold on to their HUD properties for the long term. We will look to facilitate transfers to “preservation purchasers” who commit to long-term affordability.
Renewing HUD's portfolio will require significant investment from outside entities. HUD is working to better match our processes with the low-income housing tax credit program. We have already taken significant steps to improve the way our Federal Housing Administration multifamily lending tools work with tax credits.
A vision of preservation goes handin- hand with a vision of sustainable communities. We will look to prioritize those developments adjacent to transit, with energy-saving “green” building features, and with great access to good jobs.
As a practitioner, I know firsthand that preservation is the unsung, often unglamorous work that can yield the greatest benefits for residents, and for the broader community. Thank you for your accomplishments in this area. I look forward to partnering with you.
Carol Galante is HUD's deputy assistant secretary for multifamily housing.