April 1, 2016
35,785 Affordable Homes in California
At-Risk of Conversion
Due to Expiring HUD Rent Subsidies and Maturing Mortgages Over Next 5 Years

Editor's Note:
Each year the California Housing Partnership uses data from our Affordable Housing Preservation Clearinghouse to present an annual summary of the U.S. Department of Housing and Urban Development's (HUD) subsidized housing at risk of loss of affordability in California. The California Housing Partnership collects and analyzes data from HUD and the state to assess risk of conversion to market rate for HUD-subsidized housing in California based on a number of factors and uses it to inform our own policy advocacy work in Sacramento and Washington, D.C. The California Housing Partnership is actively working with HUD, California's Department of Housing and Community Development (HCD), local governments, and nonprofit affordable housing developers to preserve this housing.

Privately Owned Federally Assisted Housing in California
Seventy-fi ve percent (75%) of California's privately owned HUD-assisted rental housing in California is supported by the Section 8 project-based rental assistance (PBRA) program. Section 8 PBRA provides landlords with market rents while ensuring that residents pay no more than 30% of their incomes toward rent. Homes with   Section 236 or 221(d)(3) subsidized loans without the benefit of Section 8 PBRA contracts are especially at-risk and are described further in the section below on Expiring Subsidized Mortgages.

What's At Risk (1): Expiring Rental Assistance Contracts
Over the next decade, hundreds of project-based rental assistance contracts in California will expire without assurance of renewal by the private landlords who own assisted properties, potentially ending the subsidies that ensure affordable housing for thousands of low-income families in the state. In the next five years, 31,515 apartments with Section 8 PBRA in 499 properties are at-risk of conversion to market rate. These properties also contain another 4,270 apartments that do not receive PBRA but are often providing housing to low income households and also may be at-risk.

From 2011 to 2015, California lost 1,230 Section 8 apartments to owner decisions to opt-out of their HUD rental assistance contracts. While this figure implies that the state will not lose the majority of the 35,785 at-risk units, there is still a strong likelihood of significant loss without action at state and local levels. The conversion of an average of 246 apartments in each of the last five years - nearly five apartments per week - represents the loss of an irreplaceable resource for vulnerable extremely low-income (ELI) renters in high-cost California rental markets. A majority of residents of HUD-assisted properties are ELI renters earning 30% or less of are median income who are also elderly and/or disabled.[1]

What's At Risk (2): Expiring Subsidized Mortgages
The current wave of expiring mortgages represents those properties developed under the 236 and 221(d)(3) BMIR HUD subsidized mortgage programs that are now reaching the end of their original 40-year term of affordability. Residents living in "unassisted" units in these properties, shown in red in the table below, face the highest risk of losing their homes without federal or state intervention. 

HUD-Subsidized Properties and At-risk Units by County
The California Housing Partnership provides analysis of HUD subsidized and at-risk properties by county and by city. This data is intended to help local governments and affordable housing advocates prioritize at-risk properties for preservation. Cities, Counties, and non-profit preservation-oriented organizations can contact the California Housing Partnership for detailed lists of the properties in their jurisdictions.
Note: The California Housing Partnership has recently made extensive efforts to match properties across datasets covering different state and federal funding sources for affordable housing in California. This effort has allowed us to better identify older HUD-funded properties that have been recapitalized using Low Income Housing Tax Credits (LIHTC) and adjust the risk of conversion to market rate to account for the extended affordability restrictions resulting from the use of LIHTC equity. Because of this improvement we are now able to better pinpoint the risk of conversion to market more accurately. As a result, the number of HUD properties we deem to be at-risk has decreased from last year. 

[1] California Rental Assistance Facts. Center on Budget and Policy Priorities. December 2012. http://www.cbpp.org/files/4-13-11hous-CA.pdf
The California Housing Partnership provides financial technical assistance and training to help nonprofit and government agencies build and preserve affordable homes for California families and seniors. For more information, please contact our Housing Preservation and Policy Research Manager, James Pappas, at jpappas@chpc.net or 415-433-6804 x 320.
The California Housing Partnership thanks our generous funders for their continued support of our 2016 GREEN Affordable Housing Preservation and Production Program.