NOAH
NOAH Preservation Strategies
Naturally Occurring Affordable Housing, or NOAH, refers to unsubsidized rental that is affordable because of low market values. According to Harvard’s Joint Center for Housing Studies, 75% of affordable rental units across the country do not receive any government subsidy. These unassisted rental buildings generally have lower rents because they are located in lower cost markets.
NOAH preservation strategies differ by market type. In low cost markets, existing small for-profit owners may need tools and support. In rising markets, mission-driven developers are the best stewards of this resource.
In lower cost markets, the vast majority of NOAH is owned by competent, responsible private market owners. In these neighborhoods it is likely that small and mid-sized for-profit owners can efficiently preserve affordability, but they are typically not looped in to government and industry policy discussions, and may need support. Entities like CIC can help build owner capacity and ensure owners have access to financing to keep buildings in good condition.
In markets where values are rising, NOAH is lost over time as prices and rents increase. Mission driven developers play a critical role in these neighborhoods to keep NOAH affordable over the long term. Those developers need tools and effective strategies in strengthening markets, including:
- Reliable acquisition financing. This helps developers move quickly to compete with market buyers. Refinancing with more favorable terms can occur later as needed.
- A mixed-income approach. This works well in these areas, with rent subsidies supporting low income households to keep cash flow consistent.