Actions to Monitor
- Establish an early warning system and monitor at-risk units. Create a list based on at-risk units in the ten-year inventory and analyses (conversion risk, costs, and resources) for possible conversions within the current and next planning period. Monitor the list on a regular basis (e.g. every three months).
- Publicize existing state and federal notice requirements to nonprofit developers and property owners of at-risk housing.
- Gauge owners’ intent to prepay a federally assisted mortgage. Establish a relationship and meet with property owners of at-risk units on an annual basis.
- Gauge owners’ interest in renewal and/or opting-out of federal, project-based Housing Choice voucher contracts. Determine whether profit-motivated owners intend to renew project-based Housing Choice voucher contracts. Five to twenty-year HUD contracts are available, subject to annual appropriations.
- Require owners who want to opt-out of a project-based Housing Choice voucher contract, prepay a HUD-subsidized mortgage, or sell their property within five years of the expiration of the rental subsidy to provide 18-24 months’ advance notice.
- Respond to any federal and/or state notices, including “notice of intent to prepay,” “owner plans of action,” or “opt-out” notices filed on local projects. Local governments (affected public agencies) receive these notices and should quickly respond by contacting property owners.
- Hold a public hearing on the intended opt-out, prepayment, or sale to ensure noticing requirements and potential strategies are examined, and initiate assistance with tenants.
Actions to Finance and Technical and Regulatory Assistance
- Support potential funding sources for mortgage refinancing, acquisition, rehabilitation, gap funding for affordable development, and rental subsidy assistance. These funding sources include predevelopment funds, tax-exempt bonds, housing tax credits, Community Development Block Grants, HOME funds, etc.
- Require replacement of low-income units converted to market-rate on a one-to-one basis.
- Act as an “intermediary” to temporarily preserve converted units until local housing sponsors can secure financing to repurchase and rehabilitate.
- Offer local incentives (lower-interest rate loans and more favorable loan terms and conditions) to owners wishing to refinance and prepay their existing mortgage in exchange for continued affordability restrictions.
- Reduce, waive, or subsidize local development fees associated with preservation or replacement of at-risk units.
- Incorporate preservation incentives/conversion disincentives into a local, preservation ordinance.
Actions to Assist Tenants
- Provide tenant relocation assistance and/or direct rental subsidies. In the event of owner mortgage prepayment or project-based Housing Choice voucher opt-out, the enhanced voucher may not be sufficient to assure affordability or the new owner may refuse to accept Housing Choice vouchers. In such cases, local relocation assistance and additional rental subsidies may be necessary. Work with the local public housing authority to determine the availability of tenant-based vouchers for tenants who choose to move from at-risk units or are displaced by conversion.
- Provide ongoing preservation technical assistance on the need to preserve the existing affordable housing stock and educate affected tenants and the community at-large about the need to preserve the current housing.