Freddie Mac: Leverage Existing Rental Housing Stock
As states and localities seek to provide economic incentives to create new housing supply, they must also consider how to leverage the existing rental housing stock, said Freddie Mac, McLean, Va.
“Public and private innovations that seek to preserve or increase the affordability of existing rental housing [both single-family rental and multifamily] could help increase access to High Opportunity Areas for low-income renters in the near term,” Freddie Mac said in Zoned Out: What Options do Renters Have to Access High Opportunity Areas.
Corey Aber, Senior Director of Multifamily Mission, Policy and Strategy at Freddie Mac, noted only about 11 percent of the very limited rental housing stock in High Opportunity Areas is affordable to low-income renters. “While we see some signs of more multifamily housing being built, much of the land is zoned for single-family housing,” he said. “Affordable housing strategies that include the preservation of both multifamily and single-family rental housing can be important to increasing access to High Opportunity Areas and the economic mobility that might result.”
The Federal Housing Finance Agency defines High Opportunity Areas as census tracts that are eligible for extra credit under its Duty to Serve regulation.
Zoned Out examined local land-use rules and access to High Opportunity Areas as defined by state Low-Income Housing Tax Credit programs using Chicago, Columbus, Ohio and Fairfax County, Va. as case studies. The GSE noted the research will help find ways to increase access to High Opportunity Areas for low-income renters.
Freddie Mac also released research on how multifamily natural disaster resilience measures and green improvements can benefit affordable and workforce housing. The first paper, Resiliency Efforts in Affordable Multifamily Housing, found proactive planning is especially important for low-income and minority communities, which are geographically more vulnerable and more at risk of experiencing financial and health challenges from natural disasters. “At present, there are several public and private market approaches to improving resiliency, including government programs (e.g., Low-Income Housing Tax Credit incentives) on the public side and insurance premium reductions and specialized financing for resiliency efforts by the private market,” the report said. “These programs and initiatives can provide the foundation for new innovations and collaboration among public and private sector actors to maximize resiliency.”
The second paper, Green Improvements in Workforce Housing, built on 2018, 2019 and 2020 Freddie Mac research with new data on energy and water efficiency improvements in workforce housing. It examined GSE’s Green Up and Green Up Plus programs, which aim to improve water and energy efficiency in workforce multifamily properties. The programs have been employed on loans totaling $64 billion and affecting nearly 630,000 rental units since inception, and efficiency improvements at these properties save renters $129 per year based on reported property data.
“Green improvements and resiliency efforts are vital to preserving affordable housing, especially in communities and properties serving minority and low-to-moderate income renters,” Aber said. “By surveying existing resiliency efforts, we are working to identify resources that the industry and multifamily operators can build upon and leverage to improve natural disaster preparedness and response.”
