MacArthur will invest $150 million to preserve and improve at least 300,000 units of affordable rental housing across the country, tripling a commitment announced four years ago.
“Nearly all of us are renters at some time in our lives, and the nation’s stock of affordable rental housing is slipping away at an alarming rate,” said MacArthur President Jonathan Fanton, who made the announcement today at a national housing preservation policy forum sponsored by the Foundation. “We hope that MacArthur’s expanded commitment to preserving affordable rental housing will accelerate the spread of promising preservation practices and policies at local, state and federal levels, where more attention and action is urgently needed.”
MacArthur’s expanded investment in the Window of Opportunity initiative includes –
• $35 million in new funding for public preservation initiatives, modeled on successful MacArthur-backed efforts in Cook County, Illinois and New York City. The new funds will be awarded to ten leading states and localities through an open, national competition.
• Continued funding for data collection, policy analysis, and expert assistance to encourage investment in affordable rental housing, promote best practices, and advance model policies at local, state and federal levels.
• Additional low-cost loans to support a total of 25 mission-driven housing organizations that are working to acquire, renovate, and preserve affordable rental properties across the country.
According to Harvard University’s Joint Center for Housing Studies, the nation lost 1.2 million of its most affordable rental homes from 1993 to 2003; another million units are at risk over the decade ahead. Approximately 37 million households – one in three – live in rental housing. In 2005, almost nine million low- and moderate-income renter households spent over half of their earnings on housing, a record high.
Three-quarters of rental buildings are more than 25 years old and increasingly need repair. At the same time, longtime government subsidies and affordability restrictions are expiring, rents have been rising, and millions of units have been converted to condominiums, abandoned or razed.
MacArthur expects its combined investments will help preserve and improve at least 300,000 affordable rental homes nationwide. The Foundation also seeks to stimulate policy reforms that reverse the loss of existing, affordable rental homes, enabling communities and rental housing owners to preserve at least one million units over the next decade.
Increasingly, policymakers at local, state and federal levels are taking action. Forty states have adopted policies that shift more existing funds to preservation and many have passed “early warning” laws or created new financial incentives that make it easier to renovate and retain properties that might otherwise become too run-down or expensive for low and moderate-income renters. A number of pending federal legislative proposals provide new tax breaks and improve funding and regulatory support for preservation projects, including those serving low-income seniors and rural communities.
Today’s announcement builds on the success of MacArthur’s Window of Opportunity initiative. By the end of 2007, the initiative will have helped renew more than 45,000 affordable rental homes at an average cost of $80,000 per unit – about half the cost of building new. MacArthur launched the initiative in 2003 with an initial commitment of $50 million for national and regional nonprofit organizations that own and operate large rental housing portfolios across the country. As part of an earlier expansion, in New York City, MacArthur helped launch a $200-million acquisition fund that aims to preserve 30,000 rentals. In Cook County, Illinois, the Foundation is sponsoring the Preservation Compact, an action plan to preserve and improve 70,000 affordable rental homes by 2020.