Recap Updates
Reference
Understanding affordable housing finance
Multifamily Affordable Housing: What Works and What Doesn't
| What works | What doesn't work | |
| Delivering affordability | Cheap rents with a clear bargain element | High rent (which require support through income supplement) |
| Income mixing | Diverse range including many working families | Income concentration below the jobs line (except elderly, who have retired) |
| Compliance | Outcome - measure results | Process - measure procedures |
| Federal involvement | Wholesale - block-granted subject to state-by-state allocations, clear program goals and performance measures. | Retail - details of individual properties prescribed within centralized legislative or regulatory rules. |
| Resource allocation | Closed-ended - resources awarded competitively | Open-ended - no competition for resources |
| Rent structures | Formulas that self-adjust using external criteria (e.g. change in median income) | Property-by-property calculations that require regulators to review annual budgets |
| Debt service coverage | 125% or higher, so properties have cushions | 110% or lower, because properties have no cushions |
| Cash flow limitations | No caps, provided rents are affordable and property is in physical/ operational compliance | Small distributions that eliminate cushions and create perverse incentives |
| Ownership structures | Private sector (for-profit or non-profit) with both profit motive and affordability mission | Direct government ownership or disengaged ownership with neither experience nor exposure |
| Assistance basing | Property basing with strong compliance.Vouchers where there is ample supply. | Property-based with no linkage to service quality.Vouchers with no reliable places to use them. |
Back to "The El Dorado of Permanent Sustainable Affordability"