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Affordable Housing Crisis: The Plight of Tenants Facing Rent Hikes

LOS ANGELES — For over twenty years, the modest rental rate at Marina Maalouf’s apartment in a structured affordable housing complex in Los Angeles’ Chinatown provided a vital lifeline for her family, which includes her granddaughter with autism.

However, that support faced a significant challenge in 2020.

The property owner, no longer bound by legal commitments to maintain affordable rates, dramatically increased the rent from $1,100 to $2,660 in 2021, placing this new cost beyond the family’s financial reach. Maalouf finds herself plagued by anxiety regarding her ongoing struggle against eviction, fearing her family might end up living in temporary accommodations with friends.

In the backdrop of surging rental costs across the nation, over 223,000 affordable housing units, similar to Maalouf’s, are at risk of being converted to market rates within the next five years. This situation leaves low-income tenants like Maalouf scrambling as they either contend with significant rent increases or face the unemployment of returning to a housing market that consumes an overwhelming portion of their earnings.

The affordable housing units in question were established under the Low-Income Housing Tax Credit (LIHTC), a federal initiative launched in 1986 that provides tax incentives to developers in exchange for maintaining lower rents. This program has successfully produced approximately 3.6 million units, representing a significant fraction of the federally supported low-income housing in the country.

“It’s the lifeblood of affordable housing development,” stated Brian Rossbert, the director of Housing Colorado, an advocacy group focused on affordable housing.

The LIHTC program transcends partisan divisions, combining social benefits with tax incentives and private capital, receiving bipartisan backing over the years. Its expansion is a key component of Democratic presidential candidate Kamala Harris’ housing strategy aimed at creating 3 million new homes.

However, the crux of the issue is that these properties are typically required to remain affordable for a minimum of 30 years. With many LIHTC projects constructed in the 1990s approaching this deadline, there are growing concerns about a potential decline in the affordable housing stock just as demand is at an all-time high.

“If we are losing the homes that are currently affordable, we are exacerbating the ongoing crisis,” remarked Sarah Saadian, vice president of public policy at the National Low Income Housing Coalition.

“It’s akin to having a boat with a hole at the bottom,” she explained.

While some LIHTC units do retain affordability through alternative government subsidies or benevolent landlords, various states have enacted measures to address the impending expirations. California, Colorado, and New York, among others, have implemented strategies to preserve affordable housing by utilizing various resources.

Local governments and nonprofits can acquire LIHTC properties as they approach their expiration, apply for new tax credits that extend affordability, or, as seen in Maalouf’s case, mobilize tenants to push for action from landlords and city officials.

Nonetheless, numerous obstacles impede these efforts. Despite the potential for new tax credits to be allocated to overage LIHTC properties, availability is limited and determined by state population estimates. Additionally, the financial capability of local governments and nonprofits to purchase and maintain these properties as affordable units poses a significant challenge. Moreover, a lack of consolidated data regarding the timing of LIHTC unit expirations complicates proactive policymaking.

There is also minimal political incentive to prioritize the preservation of these units.

“Politically, there is a greater reward for groundbreaking announcements rather than effective management of housing resources,” said Vicki Been, a professor at New York University and former deputy mayor for housing and economic development in New York City.

Maalouf has recently evolved from a reserved individual to a robust tenant advocate, actively engaging with the Los Angeles City Council in her fight for housing stability. She reflects on her initial timid nature and acknowledges the transformation brought about by the rent hikes, confronting the emotional turmoil of her housing situation each day.

Her current activism with the LA Tenants’ Union signifies her determination to avert displacement. Yet, the constant stress associated with her fight for home security takes a toll. Each morning, she recites, “We still here. We still here,” a mantra that underscores their resilience, even as fatigue sets in.

As Maalouf’s apartment predates the state’s extension of LIHTC contracts to a 55-year duration in 1996, around 5,700 units constructed during her apartment’s era are nearing expiration in the coming decade. In Texas, this number rises to approximately 21,000 units.

California’s Treasurer, Fiona Ma, has been instrumental in guiding the LIHTC program towards developers committed to long-term affordable housing goals, moving away from practices that lead to quick profit realizations.

California has enacted regulations requiring landlords to inform local governments and tenants about expiring contracts, thereby affording state and local entities the opportunity to purchase properties aimed at preserving affordability. Additionally, expiring developments are given priority for new tax credits, ensuring that future applicants are experienced in managing affordable housing effectively.

Unfortunately, some states have not modified LIHTC agreements to exceed 30 years, neglecting to implement measures equivalent to California’s protective strategies.

In 2023, Colorado passed legislation granting local governments the right of first refusal for LIHTC units, looking to conserve an estimated 4,400 that may lose their affordability protections within the next six years. The law also insists that landlords provide local and state administrations a two-year notice prior to expiration.

Yet, the practicality of local governments and nonprofits raising the necessary funds to purchase large apartment complexes remains uncertain.

As the clock ticks down on LIHTC properties, the experiences of residents like Maalouf may become increasingly common, potentially forcing families with limited financial resources back into an unforgiving housing market. Reports indicate that the median income for tenants in these units was just $18,600 in 2021, according to the Department of Housing and Urban Development.

“This situation resembles a mathematical conundrum,” Rossbert articulated while emphasizing the cycle of displacement and demand for new construction as units convert to market rates.

“Escaping this cycle is complex,” he lamented.

Colorado’s housing agency collaborates with various groups to conserve LIHTC units, backed by a dedicated fund for stable housing initiatives. However, the exact numbers of LIHTC units that can be preserved remain ambiguous, both in Colorado and nationwide.

Determining the expiring units throughout the country necessitates an extensive analysis of multiple overlapping funding sources, each having its distinct affordability standards and timeframes.

Such convoluted tracking can hinder policymakers’ and advocates’ capabilities to pinpoint when and where units will transition away from affordability, depriving them of the ability to allocate resources effectively, as noted by Kelly McElwain, who oversees the National Housing Preservation Database—the most comprehensive aggregation of LIHTC data nationally—despite its gaps in coverage.

Additionally, there is concern that making information on expiring LIHTC properties public may attract for-profit entities that lack commitment to maintaining affordability.

“It creates a Catch-22 situation, wanting to analyze the problem without inadvertently marketing properties right before their expiration,” Rossbert elaborated.

In the meantime, Maalouf’s efforts as a tenant organizer have prompted some movement within Los Angeles; the city proposed a $15 million plan to keep her building affordable until 2034. Yet, this resolution does not alleviate the pressing issue of ongoing eviction cases—Maalouf’s included—or the significant $25,000 in overdue rent she faces.

As she stood in her courtyard, Maalouf’s worries were palpable, especially when her granddaughter, Rubie Caceres, approached her for a glass of water. At five years old, Rubie’s speech comprises more fragmented words than coherent sentences, heightening Maalouf’s worries about her granddaughter’s safety in their uncertain living conditions.

“That’s why I’ve been hoping everything returns to normal, so she can feel secure,” Maalouf expressed, her voice trembling with emotion. She has advised her son to save in preparation for the worst-case scenario.

“We’ll keep fighting,” she affirmed, “but day by day it’s daunting.”

“I am weary already.”

Source
abcnews.go.com