New Measures Introduced to Preserve Affordable Housing

U.S. Sen. Sherrod Brown, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, has introduced a set of bills to lower housing costs for Americans by creating and preserving affordable housing. The Housing Supply Fund Act and the Affordable Housing Preservation and Protection Act will help to expand and preserve the supply of affordable housing, creating more options for renters and homeowners.

“All over Ohio, I hear from renters and homeowners whose only option is to pay more than they can afford for housing. We need more housing to bring down prices and give Ohioans more options,” said Sen. Brown. “These solutions would help us build and preserve more housing that renters and homeowners can afford.”

Bolstering housing inventory

The Housing Supply Fund Act will provide resources to Community Development Financial Institutions (CDFIs) and non-profit affordable housing organizations to increase the supply of affordable homes and expand housing options for renters and homeowners. Grantees can use funds for development, preservation, rehabilitation, financing, or purchase of affordable housing and related economic development and community facilities. Activities would primarily serve renters with incomes below 80% of area median income (AMI) and homeowners with incomes up to 120% of AMI. These flexible funds would allow mission-based organizations to move quickly on opportunities to create and preserve affordable housing. These investments will allow organizations to expand innovative housing initiatives, including:

  • Making smaller, less-profitable mortgage loans for starter homes.
  • Financing resident-owned manufactured housing communities to preserve communities that might otherwise be purchased by out-of-town investors.
  • Converting commercial properties to affordable housing.
  • Creating affordable housing and community facilities in transit-oriented developments that help connect workers to jobs, homes, and services like day care.

Sen. Brown’s proposal comes as the U.S. reports an estimated shortage of at least 4.3 million homes. And for extremely low-income families, it is estimated that there is a shortage of 7.3 million affordable and available rental homes nationwide.

In addition to the existing shortage, the current stock of affordable rental housing is declining in the country, as rental housing costs are outpacing what many renters earn. In 2022, it was reported that more than 22 million renters–half of all renters–were paying more than 30% of their income towards housing costs, with more than 12 million paying more than half of their incomes towards housing.

Renovating existing housing stock

The nation’s shortage of affordable homes makes it imperative to preserve the limited housing supply available. The Project-Based Rental Assistance programs of the U.S. Department of Housing & Urban Development (HUD) provide approximately 1.3 million affordable homes to low-income workers, seniors, families with children, and persons with disabilities. However, some HUD-assisted buildings are aging and are in need of immediate rehabilitation. In instances where an owner has mismanaged a property and created poor conditions for residents, HUD and the community can struggle to find a new, well-qualified owner to take over the building who has immediate access to the funding necessary to make critical health and safety improvements. Without these improvements, the building could lose assistance or be closed, forcing residents to leave their community.

The Affordable Housing Preservation and Protection Act will:

  • Provide loans to qualified owners of distressed HUD-assisted housing to make renovations necessary to preserve and improve the property for the long term.
  • Improve the quality of HUD-assisted housing and, in cases of mismanagement, gives HUD new tools to locate well-qualified new owners to preserve a property without displacing residents from the community.
  • Strengthen outreach to local stakeholders and residents in the preservation of distressed properties.

Continuing the fight for affordable housing

These two measures are the latest actions by Sen. Brown to preserve affordable housing nationwide. Earlier this month, Sen. Brown introduced the “Yes in God’s Back Yard (YIGBY) Act,” legislation to support faith-based organizations and colleges wanting to build and preserve affordable housing on their land, and reduce barriers to the development of this housing.

As currently proposed, Sen. Brown’s YIGBY Act will:

  • Provide technical assistance to faith-based organizations and institutions of higher education wanting to use their existing land to increase or preserve the supply of affordable rental housing.
  • Provide technical assistance to local governments to learn best practices and how they can facilitate the production of affordable rental housing on land owned by faith-based organizations and institutions of higher education.
  • Create challenge grants to provide additional resources to communities that adopt policies that remove barriers to the production and preservation of affordable rental housing on property owned by faith-based organizations and institutions of higher education.

Click here to read full text of the Housing Supply Fund Act and click here to read the Affordable Housing Preservation and Protection Act.

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Eric C. Peck

Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for Entrepreneur.com.
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