Keeping existing rent-restricted housing affordable and well-maintained over the long term is as important as building new affordable housing. The State’s housing preservation efforts generally focus on periodically investing in the physical condition and financial sustainability of existing affordable projects as they age, in return for extending the rent restrictions attached to the property. Other related preservation priorities include renewing federal rent assistance contracts attached to specific properties, and supporting the preservation of manufactured home communities as long-term affordable housing options.
While it’s easy to become focused on housing units and project finances, it is critical to keep the potential impact on residents at the center of preservation efforts.
If a development is lost to market-rate or falls into disrepair, low-income residents may face a potential nightmare of losing stable housing they can afford.
Definition of preservation
Preservation means any project with at least 25% of the units having existing federal Project-Based Rental Assistance Contract; and
- The HUD Section 8 Project-Based Rental Assistance Contract is expiring within 7 years of the date of the OHCS NOFA application; or
- The USDA Rural Development direct mortgage is maturing within 7 years of the date of the OHCS NOFA application; or
- The USDA Rural Development project has a pending prepayment request; or
- Note: USDA Rural Development projects with a maturing mortgage within 3 years of the date of the OHCS NOFA application, or where the owner’s prepayment request has been approved, will be prioritized.
- The USDA Rural Development project’s restrictive use covenants have expired; or
- Projects with Public Housing Units undergoing a preservation transaction involving a comprehensive recapitalization, including those converting to HUD Section 8 projects under the HUD Rental Assistance Demonstration or projects under the HUD Section 18 Demolition and Disposition Programs.
Preservation funds for developers
Preservation compliance for project owners
Preservation prevents displacement, is generally cheaper than building new housing, and conforms to existing land-use patterns.
Acquiring and rehabilitating existing affordable housing is often complicated.
Affordable housing property owners and management agents are required to follow the Publicly Supported Housing Contract Preservation(PuSH-CP) process and policy to help preserve affordable housing.
The PuSH Seller’s Tax Credit is a benefit for people selling affordable housing. If the seller sells the property to someone who agrees to keep the rents affordable for at least 30 years, the seller can receive this tax credit.