Partnering to Preserve Affordable Housing
- Jan 30, 2018
Enterprise Community Investment and Community Preservation and Development Corp. (CPDC) have recently announced that they will join resources in order to preserve and expand affordable housing options across the Mid-Atlantic. CPDC, which has more than 30 properties totaling more than 10,000 units in the Mid-Atlantic, will operate as an affiliate of Enterprise. In total, Enterprise has created 470,000 affordable homes, including 144,000 homes through the LIHTC program.
Housing insecurity continues to grow in the U.S., with nearly 19 million low-income families either homeless or spending at least 50 percent of their monthly income on housing. Many affordable housing players believe any potential solution must involve increasing the supply of affordable homes through both new construction and the preservation of existing properties.
Multi-Housing News spoke with Enterprise Community Investment President & CEO Charles Werhane and CPDC President & CEO Michael Pitchford about the seriousness of the affordable housing crisis in the Mid-Atlantic and how they plan to collaborate in order to create and retain affordable homes.
What are the greatest challenges in developing affordable communities across the Mid-Atlantic?
Michael Pitchford: CPDC is primarily a preservation developer. The bulk of our work involves the acquisition of existing multifamily properties and redeveloping them while preserving affordability. Our primary challenge in this endeavor is the cost of acquisition stock. Years of lower production during the Great Recession left us with a supply and demand imbalance and much higher purchase prices are the result. Add to this higher initial cost, rising interest rates and lower LIHTC value, the result of tax reform and it makes financial feasibility a much greater challenge than pre-recession.
Charles Werhane: Many of the challenges Mike mentions apply to building new affordable homes as well—the lower value of the housing credit because of tax reform and higher interest rates make financing harder. For new properties, finding good sites—ones that are affordable and also connected to other resources that people need, like transit and good schools—is very difficult in a region where housing of all types is in high demand.
How serious is housing insecurity in the Mid-Atlantic today?
Werhane: It’s a deep and growing problem. Washington consistently shows up as one of the most expensive housing markets in the country, with high costs extending both north past Baltimore and south to Richmond. In Baltimore, for example, more than 50 percent of all renters, and 40 percent of home owners, are housing insecure, paying at least half of their income for housing, according to a Baltimore City Council Resolution. This has serious implications for both the quality of life and overall economic sustainability of the Mid-Atlantic region—including its ability to attract, train and retain a diverse, skilled workforce.
Which areas of the Mid-Atlantic suffer most from the lack of affordable housing options?
Werhane: Affordable, quality housing is a large and increasing challenge throughout the region. A 2015 report from George Mason University projects an additional 149,000 low-income households will join the metropolitan D.C. area by 2023. This demand exacerbates the trend, especially in cities like Washington, D.C. and Baltimore, where thousands of affordable units are lost each year. either because they’re bought and upgraded or because they’re neglected, but the problem extends into suburbs and more rural areas. Also, it’s not just a question of cost—it’s also a question of having homes that are connected to the other resources that create opportunity—health care, schools, jobs and transportation.
What are this partnership’s plans in the short term?
Werhane: We want to make sure both organizations are benefitting from the other’s strengths: expanding CPDC’s resident services program to Enterprise properties, for example, or using Enterprise’s digital capabilities to support CPDC’s work. The key is to provide opportunity to low-income families across the Mid-Atlantic.
Images courtesy of Enterprise Community Investment & CPDC