🏡💚 Housing that's affordable... until it's not

December 1st, 2023

Just because a home is affordable today doesn’t mean that it will be tomorrow. That reality is leading to a loss of affordable housing units in California, even as we already have an affordable housing shortage. That’s not because affordable housing units are being bulldozed are demolished. The way we lose affordable homes is inherent to the affordable housing system we have in the US.

Affordable housing is available to low-income renters primarily through two types of homes:

1. Subsidized multifamily properties - units that receive federal, state, or local subsidies that require them to be affordable

2. Unsubsidized, “naturally-occurring” affordable housing (NOAHs) - market-rate units that are affordable due to some combination of factors, such as the location and condition of the building

Every year, the California Housing Partnership (CHPC) puts out reports showing the affordable housing units that have been lost, and those at risk of being lost soon. In a state with an acute housing crisis, the results are pretty staggering.

Since 2020, they estimate over 120,000 NOAH units have become unaffordable. In the coming years, they find that more than 320,000 additional NOAH units are at risk of becoming unaffordable. For a sense of scale, right now there are about 860,000 NOAH units in the state.

The reasons for this are numerous and difficult to completely untangle, but CHPC points to two main drivers. The first is a continued and worsening shortage of affordable housing across the state (i.e. not enough supply), which drives up the market price for these homes. But the other is the increasing acquisition of these properties by large, for-profit private equity firms like Blackstone. Blackstone is notorious for being the largest landlord in the nation, the epitome of the way we treat housing as a speculative asset for financial investment, instead of a basic need and human right. One recent report highlighted San Diego County, where Blackstone purchased 5,600 naturally occurring affordable housing units in 2021 and, as units become vacant, the company has raised rents in some units between 43-64% in just 2 years.

Looking at the subsidized housing is no better. Between 1997 and 2022, the state has lost 22,078 affordable homes, with an additional 31,309 at risk of losing affordability in the next 10 years.

The reason for the loss of subsidized affordable homes is much more straightforward than with NOAHs. In this case, the subsidies that were used to build the affordable housing projects had requirements that the units stay affordable for a certain number of years. After that, those units can convert to market-rate. And they often do.

For example, the biggest affordable housing program in the US is the Low-Income Housing Tax Credit (LIHTC). From 1986 to 1989, federal law required LIHTC properties to stay affordable for only 15 years. So, from 2004-2006 there was a wave of affordable homes lost from projects that were financed through LIHTC. (LIHTC now requires at least 30 years of affordability.)

Chart showing the loss of subsidized affordable housing units since 1997. Source: California Housing Partnership

California’s own Department of Housing and Community Development recognizes this as a huge issue, stating “potential conversion of affordable housing to market-rate housing is an ongoing and critical statewide problem.” Yet, it is the result of the  system we’ve created and continue to rely on to try to solve our affordable housing crisis.

This is so acute that in some areas we are losing way, way more affordable homes than we’re building. A report last year found that from 2010-2019, the city of Los Angeles lost about 111,000 affordable homes while only building 13,000 new affordable units, a net loss of 98,000 affordable units in 10 years.

So what can be done about this?

In some cases, this has created opportunities for militant tenant organizing, like in the Hillside Villa apartment complex. This is a fascinating case study that probably merits its own newsletter, but the short story is that in 2018, this 124-unit complex had its affordability requirement expire, and the landlord immediately moved to increase the rent over 200% for low-income tenants. But the tenants fought back, and have been fighting ever since to stay in their homes and keep it permanently affordable. LA City voted to acquire the building back in 2022, but efforts have stalled, and the fight goes on.

One of the other major efforts to preserve affordable housing has been to secure funding for the acquisition of properties at risk of losing affordability. These funds are crucial to provide the money needed for cities (like LA), and other nonprofit entities (like community land trusts), to purchase these properties and ensure they stay affordable. At the state-level, housing and tenant groups have been calling for the creation of the Community Anti-Displacement and Preservation Program (CAPP). Last year, this was a budget ask with accompanying legislation in SB 225 (Caballero). The bill/budget request didn’t go through, but CAPP has made it into the current version of the affordable housing bond proposal (AB 1657).

All of this begs the question: why is all our affordable housing only affordable temporarily? Shouldn’t we have affordable housing that remains affordable forever? Which should hopefully lead to the bigger question: shouldn’t all housing be affordable to everyone?

Our social housing campaign responds with a definitive yes to that question. Social housing (now by definition in state law!) is permanently affordable and forever protected from the private, speculative housing market.

And while we will fight to build new social housing, we will still need to address the loss of affordable homes. We can try to do this through policy. But as the Hillside Villa tenants also show, we can also do this through organizing and direct action. That should give us hope, of both the many ways we can fight, and the inspiring models of how we can win.

WHAT WE’RE READING

• What Can Be Done When LIHTC Affordability Restrictions Expire? (Shelterforce) — for further reading on expiring affordability requirements in LIHTC housing projects

• What one man’s castle in Scotland says about L.A.’s homelessness crisis (LA Times) — I may write about this more in a future newsletter, a really interesting look at the impact of having a right to housing enshrined in law

• Across California, eviction cases have returned to — or surpassed — pre-pandemic levels (CalMatters) — also deserving of its own newsletter, new analysis on evictions from CalMatters

• Plans to get an entire block off the natural gas system take shape in one California city (Smart Cities Dive)

I’ve sent this out to everyone on the current CA GND listserv. If you don’t want to get these weekly newsletters, feel free to unsubscribe below. If you know someone that would be interested, send me their email :)

We’ll be back with another newsletter next Friday morning. Please send any relevant topics, articles, reports, or intel to me at zach@apen4ej.org!