As our MAI appraisers complete multifamily housing commercial appraisals and rent comparability studies (RCS) for HUD and private clients, FRG has extensive multifamily housing knowledge. And as a result FRG has a great deal of interest in remedies to the affordable housing shortage.
I can still remember signing my first apartment lease. I was 19 years old and excited to move into my very own 500 sq-ft, one bedroom, one-bathroom home. Well it wasn’t all mine, because I could not afford the apartment, thus I had a roommate. Even with a roommate, this was the first time I felt like a responsible adult.
Unfortunately, many today are struggling to find a place to call home. Nationally, the number of renters has reached historic highs, and as a result it is becoming increasing difficult for many to find safe, quality affordable housing. In fact, according to a Harvard University Housing Study the availability of affordable rental housing is being affected by:
- High rental demand and low vacancy rates, which allow landlords to continually increase rental rates
- Demand from higher income renters is driving the construction of luxury vs affordable multifamily rental housing
A recent Ohio Housing Finance Agency report that assessed the state’s housing needs noted that lower income Ohioans are struggling to pay for housing as they spend more than 30% of their income on housing. The agency discovered that there are only 43 available and affordable rental units for every 100 extremely low-income renter. And these extremely low-income renter households are typically made up disproportionately with seniors and/or small children.
The shortage of affordable housing units will not be solved overnight, however, a lot can be done now to begin to spur an increase. City officials can work with developers, lenders and state officials to leverage innovative approaches to drive an increase in the building of affordable housing units.
- Offer private developers incentives and tax breaks to devote a portion of their multifamily housing developments to affordable units
- Donate undeveloped land to developers seeking to build affordable housing
- Explore lower cost construction methods eg prefab, containers, etc.
- Encourage the conversion of blighted buildings into affordable housing.
The Ohio Development Services Agency is working to help finance projects, many of which will add affordable housing units throughout the state. Recently the state awarded twenty-three projects with historic preservation tax credits, six of which are conversion projects in northeast Ohio, including the following:
- Clark-Fulton neighborhood industrial complex vacant since 2008 to be converted into a mixed-use development with affordable units
- Cleveland school (Longfellow) building closed since 2017 to be converted into affordable housing for seniors.
The affordable housing shortage presents an opportunity for city planners to drive growth and redevelopment in underserved areas.