to keep pace, the production of new units
must not only help meet expected demand
but also replace those units no longer in use
due to obsolescence, fire, and conversion to
market-rate condominiums.
One major concern is the ongoing loss of
low-cost rentals, which tend to be older than
other rental homes. Although representing
a relatively small share of the total rental
stock, 650,000 low-cost homes (many of
them single-family and in properties with
fewer than five units) that rented for less
than $400 per month accounted for more
than a one-third of the total rentals removed
from the market from 2001 to 2011.37
In addition, supplying multifamily housing
for our nation’s lowest-income families is
extremely challenging because of the substantial gap between development costs and
what these families can afford to pay in rent.
In practice, most affordable housing developments depend upon a number of different
subsidized financing streams, both equity
and debt, that are only available to a devel-
The Silent Housing Crisis: A Snapshot of Current and Future Conditions
oper if certain affordable housing conditions
are met. Meeting these conditions, as well
as complying with land-use, zoning and other
regulatory restrictions, can be complex, timeconsuming, and costly. As a result, a significant level of subsidy is generally necessary
to make these developments economically
viable. In an era of fiscal austerity and budget
sequestration, unprecedented reductions
in federal housing subsidies have adversely
impacted production of affordable housing.
Policymakers must also contend with the
tens of thousands of multifamily units
that become obsolete each year and are
removed from the market. Complicating
matters further is the fact that the “affordability” restrictions on some 2 million government-subsidized affordable rental homes
are expected to expire at some point over
the next decade. While many of these units
will remain in the affordable stock, others
(particularly in those in communities where
rental demand is strong) will likely covert
to market-rate properties with considerably
higher rents.38
Policymakers
must also contend
with the tens of
thousands of
multifamily units
that become
obsolete each
year and are
removed from
the market.
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