Affordable apartments have been a stepchild in housing lately, as everyone chases affluent "renters by choice" and would-be homeowners. An initiative recently announced by the John D. and Catherine T. MacArthur Foundation aims to change that. Over the next 10 years, the prominent Chicago-based foundation plans to contribute $50 million for preserving reasonably priced rental units around the country.
The commitment comes at what the foundation sees as a critical time for affordable apartments. Since the foundation began investing in housing in the 1980s, rents have risen significantly in many cities, and thousands of subsidized units have been transformed into market-rate rentals as government subsidies expire. "If we wanted our new investments to make a difference, we had to make sure we weren't losing ground," explains Debra Schwartz, director of program-related investments.
The answer was preserving existing affordable units, which typically is more cost-effective than building new. So the foundation is providing low-cost loans and grants to community development groups, specialty lenders, policy organizations, and researchers, with the goal of saving 100,000 units.
One recipient is Community Preservation and Development Corp. (CPDC), a Washington group that buys subsidized apartments at risk of becoming market-rate rentals. It's not an easy job. The CPDC, which relies on government funding and low-income tax credits to fund its purchases, frequently competes against for-profit developers. "It takes us a long time to put money together, so that puts us at a serious disadvantage," says Leslie Steen, president. "The MacArthur money will help us with that." The $1.5 million investment from the foundation will also help the CPDC expand. It generally preserves 160 units annually, or about two to three buildings, a number it now plans to boost to four.