Agenda - Council - 06/28/2016 - Laserfiche WebLink

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M1 There are several distinct types of housing preservation. For example, preservation can * The physical upgrading of housing, which could range from moderate tosubstantial rehabilitation; this is the physical preservation of housing. * Securing or extending long-term commitments from property owners to continue to participate in o program such as project -based Section 8; this is preservation ofofederal subsidy that creates affordability. * Establishing or continuing rent and income restrictions making units affordable over the long term; this is preservation of housing affordability. Key prioritiesfor preservation include the region\u chronically underfunded public housing stock and the region\ularge stock ofproject-based Section8propertiea.W1anyoftheoe are nearing the end of the useful life of major building oyatenna or contractual obligations for affordability. In practice, particularly for existing publicly subsidized housing, failing to take action 0n8property inone 0[more 0fthese "preservation dinnenoi0no''could have 8 harmful effect. For example, an owner ofa multifamily property with existing project -based Section 8 assistance may have deferred maintenance requirements that must be addressed to pass the inspection required to participate in the Section 8 program. If the housing fails to pass inspection and is unable to continue in the Section 8 program, or if an owner prepays a maturing HUD mortgage and tenants are not provided housing choice vouchers, federal dollars that could come to our region are lost. Moreover, the owner now has a major decision to make: p Let the property further deteriorate and hope that the low-income tenants will produce enough rental revenue to keep the property inoperation, even when capital improvement needs gounaddressed and/or building operations and maintenance services are pared back. p Upgrade the property and convert it to a "market -rate" property that produces higher unoubodizedrents that may price -out existing tenants. � Sell the property onthe open market. (This may 0[may not preserve the housing low- and moderate -income households.) * Seek public funds for the property's rehabilitation and keep the housing affordable. or the housing's affordability to If the owner chooses any one of the first three options, there may or may not be a financial profit or loss, but all three would likely result in the loss of subsidized units and the loss of federal project -based rental subsidy funds. Not only does this leave federal dollars that could have come to the region on the table, but under all three scenarios households will fWo:omwrmmes