Housing GSO: HRA Greensboro Affordable Housing Plan

AFFORDABLE RENTAL HOMES

ESTABLISH HOUSING PRESERVATION FUND | Overview

Key Partners • City of Greensboro - NDD • Community Foundation of Greater Greensboro • Invest Health • Affordable housing developers • Fund administrators

Housing preservation funds provide financing for developers to acquire and improve the quality of existing affordable rental homes. The funds can target subsidized rental homes where the affordability restriction on the property is expiring or unsubsidized rental homes that are affordable, referred to as naturally-occurring affordable housing (NOAH). NOAH typically makes up a city’s most significant portion of housing that is affordable to low-income renters. However, this housing is often aging, positioning it for lower-cost acquisition and redevelopment in hot neighborhood markets, or to fall into obsolescence and disrepair in less active markets. The City should establish a housing preservation fund, capitalized through a mixture of public, private, and lender contributions, to invest in its stock of NOAH and slow the expansion of the affordable housing shortage. Rising rents and obsolescence are depleting Greensboro’s supply of available affordable rental homes, a trend happening in cities across the country. A housing preservation fund in Greensboro will allow developers to identify preservation opportunities and purchase buildings with low- cost financing that will not require them to drastically raise the rent or displace residents. A housing preservation fund will have the greatest near-term impact on the City’s supply of affordable housing. Creating a preservation fund will require substantial public, philanthropic, and private funding, but will allow the City to maximize its investment as it layers public dollars with other sources of funding. Leveraging public-private partnerships, in addition to dedicated public funding, can create significant impact as the City simultaneously seeks to develop new affordable units through other programs. Greensboro should partner with funders to establish a preservation fund to acquire existing affordable rental homes. The City’s affordable housing gap is growing as the supply of existing affordable rental homes declines and properties fall into disrepair. A preservation fund will help preserve existing stock and slow the increase of the affordable housing shortage for renter households earning $30,000 and below.

Action Steps

1. Establish a working group with committed funders to advance the design of the fund

2. Evaluate potential pipeline of preservation projects

3. Select a fund administrator and work with them to develop loan products and raise additional funding

4. Launch fund

Anticipated Cost to Implement: ~$5M In public support to launch fund

HR&A Advisors, Inc.

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