The Danger in Restricting Our Definition of “Preservation”

Posted by Barbara Samuels on February 8, 2016

A post last week called "Duty to Serve = Your Duty to Comment," by Michael Bodaken and Ellen Lurie Hoffman highlights several proposals within FHFA's Duty to Serve rule that they believe warrant our field's closer inspection and comment before the deadline. In their post, they assert:

"While we strongly support new construction deals with long-term affordability restrictions in high opportunity areas, we firmly reject including such housing within the 'preservation' category in this rule … We strongly discourage FHFA from categorizing this activity as a subset of preservation because including 'new construction' within 'housing preservation' … dilutes the very concept of preservation. Of course we urge Fannie and Freddie to provide preservation incentives in higher opportunity areas, but within their housing goals, not as part of their Duty to Serve.

FHFA should follow the relevant statute, which directs the enterprises to serve three specific underserved markets: affordable housing preservation, rural housing and manufactured housing. The Enterprise should be encouraged to invest in preserving existing housing to avoid further losses of this valuable stock."

I have to disagree with the unduly limited definition of “preservation” in this piece. The real focus of preservation—and the definition—should be on the bigger picture of preserving the assisted/affordable housing stock in a community or region—the numbers of units available to meet the housing needs of people living in an area—and not just on the smaller picture of the fate of individual properties.

Preservation of the inventory does not only or always entail acquisition and rehabilitation of an individual building or project. Rehabilitation of an existing project is not always feasible or the best strategy for meeting the housing needs of the residents of the developments, much less of the community generally. In some cases, it is safer for residents and/or more cost effective, desirable, or strategic to shift the operating subsidy and available capital funding to another location(s).

But Bodaken and Hoffman would limit the definition of “preservation,” and thereby FHFA’s Duty to Serve, to rehabilitation of existing buildings, as and where they are, even excluding new replacement housing in another location.

One problem with this cramped view is that when it has been infeasible or undesirable to rehab a specific project—or simply when no one stepped forward to do so—both the units and the subsidy have been lost altogether to the area’s inventory of affordable housing  (e.g. where the project is near an environmental hazard, in an unsafe area, few tenants want to stay, lacks the unit mix to meet current needs, or is too deteriorated to feasibly be rehabbed.) The fate of our affordable housing inventory, and the families that depend on it, should not be so tied to the fate of specific properties and sites.

Another problem with Bodaken and Hoffman’s proposed definition is that it assumes the inherited geography of segregation in the locality and region will be re-upped for another 40 plus years. This is neither morally nor legally acceptable. FHFA could and should be playing an active role in correcting the mistakes of the past by helping to finance expanded housing choice and opportunity.

In short, the limited definition proposed in the piece for FHFA’s duty to serve would unduly restrict FHFA in meeting both its preservation mission and its duty to affirmatively further fair housing.

About the author more »

Barbara Samuels is Director of the Fair Housing Project at the ACLU of Maryland.

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