For this issue of Inclusive Recovery Insights, I’ve invited my longtime colleague Abigail (Abi) Suarez to join me in reflecting on the necessity of affordable housing preservation for a more inclusive post-COVID-19 recovery. In her role as vice president of global philanthropy for JPMorgan Chase & Co., Abi leads a grant portfolio focused on affordable housing that is part of JPMorgan Chase & Co.’s $2 billion in philanthropic commitment in corporate responsibility. Previously, Abi served on the practitioner side as market lead for Capital Impact Partners, responsible for developing and implementing strategic plans to originate loans in the mid-Atlantic to New York region.
Nearly every day we see how the COVID-19 health and economic crisis is affecting housing stability. Though these problems are increasing, they aren’t new. Before the pandemic, America was already facing a severe housing crisis. And now, with as many as 30–40 million people at risk of eviction—including a disproportionate number of households headed by Black mothers—the danger that we’re facing a mass displacement of marginalized communities can’t be overstated.
The shock of the COVID-19 economic crisis forced funders like Abi and policy wonks like me to pivot from an urgent innovation agenda focused on increasing the supply of affordable rental housing to identifying public and private actions to ensure stability for the most-affected renters and homeowners—who are more likely to be people of color.
But we shouldn’t ignore that part of the reason we’re in crisis is because historically, not enough attention has been paid to intentional strategies for ensuring adequate, consistent supplies of affordable housing. On its own, the market cannot supply housing that’s affordable for people living on minimum wage because it does not “pencil out.” As a practitioner, Abi saw this firsthand: it costs more to build and operate affordable housing than people making minimum wage can realistically pay.
Small mom-and-pop landlords, who own the majority of “naturally occurring rental housing” are hard pressed to keep their properties priced at a level that lower-income renters can afford. And these homes are more likely to be older and in need of updates. As renters have lost income, these owners have lost the cash necessary to maintain their properties, and many of them are feeling pressure to sell to bigger companies, which may convert them to higher-rent buildings.
As funders, Abi and I both placed high priority on small-building preservation. Philanthropy is the only sector able to help build local capacity and test models to preserve smaller properties effectively, then share those insights at a national level. Equipping nonprofit housing developers to preserve affordable rental housing has long been our common passion. Abi’s work has focused on business strategies to maintain affordability, increase community ownership, and prevent displacement. My own work with the MacArthur Foundation Window of Opportunity initiative promoted investment in nonprofit developers, policy advocacy, and research in affordable rental housing preservation. Each week, we meet with other housing leaders to discuss these challenges and track what’s happening to renters and housing providers affected by the COVID-19 crisis. Some of our insights are having an impact and driving the narrative about where to target federal assistance.
One thing is clear: during this crisis, we need to stabilize renters and the affordable housing we have, even as we look toward the future. Preservation strategies serve an economic goal for sure, but the messages behind these decisions serve an even deeper purpose: these choices tell low- and moderate-income families that they belong and are valued in their communities.
Preservation has always been a smart strategy; the pandemic has made it a critical one for ensuring an inclusive recovery.
Preserving affordability in the nation’s capital
Before COVID-19, the Washington, DC, region faced a number of housing challenges. The city’s ever-increasing pace of professional and political jobs made it one of the nation’s fastest-growing cities, with population growth far outpacing housing production, and rents and home prices often too high for many city residents. Not more than 20 years ago, DC was a city in economic distress. The Urban Institute’s analysis of housing challenges in the DC region pointed out the deep affordability gap: the number of low-cost housing units available in 2019 fell short of household needs by 264,000. At the economic growth rate projected by the Metropolitan Washington Council of Governments, the region needs 374,000 more housing units by 2030, and faster growth would require more. We find it encouraging, however, that today, city and regional leaders are planning for a more inclusive recovery.
Partnerships between local governments,nonprofits, business leaders, tenants, and landlords are helping the most disenfranchised neighborhoods and residents secure a place in a growing economy. The Urban Institute and JPMorgan Chase have collaborated to bring new data and evidence to pave the way to progress. Recently, as a part of its $30 billion commitment to close the racial wealth gap, JPMorgan Chase elevated the preservation of affordable housing as a key priority.
JPMorgan Chase is focused on alleviating pressure on owners of small, naturally occurring affordable housing to sell to bigger developers. The organization’s recent grant to the Housing Counseling Services (HCS) Small Building Preservation Collaborative has the goal of preserving small properties east of the Anacostia River and expanding efforts to establish a scalable, replicable model for preservation of properties for lower-income renters. The grant represents a unique partnership: HCS is working with National Housing Trust (NHT) and Mi Casa to provide a comprehensive strategy to preserve small properties and prevent the displacement of current low-income families. HCS will provide direct services to identify at-risk properties, educate tenants, form tenant associations, and link tenants to the resources necessary to prevent displacement, while NHT and Mi Casa will bring their policy, finance, and development skills to find solutions to financing gaps.
Inclusive housing for inclusive recovery
During a crisis, stabilizing and preserving housing affordability may not be high on the list of inclusive recovery strategies. Yet this is the most important time to be intentional about stabilizing the lives and homes of people in crisis today and preserving housing affordability for the future. The risk that housing prices will climb permanently out of reach for millions of low- and moderate-income households, especially for families of color, makes this an essential part of an inclusive postpandemic recovery.