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Prioritizing Cheap Apartments

Experts have dubbed it “naturally-occurring affordable housing,” but you might know it better as “cheap apartments.” 

Whatever you call it, it’s increasingly endangered in California, according to a new report out today from the California Housing Partnership, a nonprofit that advocates for more affordable housing.

In legislative circles, “Affordable housing” with a capital-A seems to get all the attention. Those are the units usually found in buildings built by nonprofits, that are subsidized with taxpayer dollars and legally restricted in how much they can rent for. 

In California, there are a little more than 500,000 of those types of units, and they’re the destination of choice for billions of dollars in state spending each year.

That’s in contrast to nearly 864,000 affordable units of the “naturally-occurring” variety, according to the report, which drew on a database of private real estate data. 

Looking at market rental data, property age, building quality and a list of other factors, the report estimates that:

  • 38% of those units are currently “at-risk” of becoming unaffordable, either as a result of rental increases or acquisition and redevelopment.
  • The areas of the state with the highest share of the affordable stock at risk are in the fastest growing: the Inland Empire, the southern Central Valley and Sacramento.

Matt Schwartz, the partnership’s president, argued that state legislators need to start prioritizing this stock of cheap housing as the vital resource of still-affordable housing it is.

  • Schwartz: “The scale of the affordable housing challenge cannot be met, in the short term at least, by just relying on the federally- and state-assisted affordable homes… (but) the state has no program that’s specifically designed to preserve these.”

This isn’t just a California phenomenon. A 2021 report from the consulting firm McKinsey & Company said these unsubsidized cheap rentals, rented “predominantly” by low-income people of color, make up “the lion’s share of affordable-housing units” across the country.