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The 2021 Picture of Preservation is a joint report by the Public and Affordable housing and Research Corporation and the National Low Income Housing Coalition.

Executive Summary

The United States faces a shortage of nearly seven million rental homes affordable and available to the lowest income households. As a result, 70% of extremely low-income renters whose household income is below the poverty threshold or 30% of their area median income (AMI) are severely cost-burdened, paying more than half of their income on rent and utilities (NLIHC, 2021). Meanwhile, federal housing subsidies provide a vital, albeit insufficient, supply of housing affordable to the lowest income renters, while state and local subsidy programs fail to adequately fill the gap. How to address this shortage of affordable housing, while managing and protecting the existing stock is a critical question for affordable housing policy.

Federally assisted rental homes eventually require renewed and sustained funding commitments to ensure future affordability and habitability as buildings age and existing rent and tenant eligibility requirements come up for renewal or extensions. Ensuring these commitments is the cornerstone of affordable housing preservation. Preservation is essential for any realistic approach to protecting the lowest-income renters and expanding the supply of affordable housing for them. Preservation mitigates displacement and housing instability for current tenants, prevents the loss of difficult-to-replace affordable housing, reverses disinvestment from distressed communities, presents an opportunity to reduce greenhouse gas emissions through energy retrofitting, and prevents the further decline of the already limited federally subsidized housing stock (PAHRC and NLIHC, 2020).

Using data from the National Housing Preservation Database (NHPD), this report focuses on the challenge of preserving the federally assisted housing stock in the face of the national affordability crisis and chronic underfunding for housing programs. Based on our analysis of NHPD data, we find that:

  • Nearly five million rental homes were supported by federal project-based assistance in 2020, which represented 10% of the US rental housing stock.
  • For-profit organizations owned half of federally assisted rental homes in 2020.
  • Affordability and income restrictions are set to expire for 312,446 (6%) federally assisted rental homes by the end of 2025. The majority of these homes are supported by the Low Income Housing Tax Credit (LIHTC) (44%) or project-based Section 8 (42%).
  • Not all homes with expiring affordability and income restrictions will be lost. Some will be preserved. Based on the percentage of homes lost in past years 176,760 of the federally assisted homes with expiring affordability restrictions over the next five years could be lost if preservation efforts are not expanded.
  • Twenty-three percent of public housing homes and 4% of homes assisted by Project-based Section 8 failed their last REAC inspection.
  • Between 2019 and 2020, 99,845 federally assisted homes were added to the NHPD and 44,629 homes were lost, leaving a net gain of 55,216 new affordable homes. Tracking changes in the NHPD can indicate general trends in the federally assisted housing stock, though it may underestimate total homes preserved or lost in a given year given time lags in HUD and LIHTC programmatic data
  • Approximately 143,456 homes awarded a LIHTC subsidy since 1990 lost their affordability restrictions early. Four-in-five of these homes lost their affordability restrictions after 15 years of affordability, suggesting they may have exited through the Qualified Contract (QC) process.

Public policy must address these preservation challenges through increased funding and strengthened protections at the federal, state, and local levels. The housing stability of current tenants and efforts to close the broader affordable housing gap will be undermined without these interventions. The Build Back Better Act or any federal legislation containing similar, historic funding levels for affordable housing construction and preservation would go far in addressing the challenges presented in this report. Increased funding for deeply targeted federal programs such as the national Housing Trust Fund (HTF), public housing, Housing Choice Vouchers (HCVs), and HUD Project Based Rental Assistance is especially critical. Any federal investment in affordable housing should include a provision to close the QC loophole in the LIHTC program to prevent the further, unnecessary loss of homes. States and localities should also increase funding for affordable housing preservation and strengthen preservation policies, particularly in the administration of the LIHTC program.

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