What is the Ohio Preservation Compact?
The Ohio Preservation Compact is a partnership comprised of three key advocates of affordable housing in the state:
- The Ohio Housing Finance Agency (OHFA), which allocates the state's housing financial resources and guides policy leadership
- The Coalition on Homelessness and Housing in Ohio (COHHIO), which provides technical assistance to increase affordable housing and has an exceptional approach to engaging tenants
- The Ohio Capital Finance Corporation (OCFC) together with its parent company Ohio Capital Corporation for Housing, which supplies predevelopment, acquisition and bridge financing to launch preservation projects
What are the goals of the Ohio Preservation Compact?
The Compact set a goal to institute activities resulting in the preservation of at least 14,000 units statewide over the next 10 years including:
- Implementing a scalable and sustainable $25M Preservation Loan Fund with financial products that assist in the preservation of Ohio affordable housing
- Creating and managing an online database/clearinghouse for owners of affordable rental housing and potential owners, providing detailed information on at-risk affordable housing developments in Ohio
- Determining which Ohio affordable housing properties are most at-risk of losing rental assistance or rental/occupancy restrictions based on income
- Developing strategies to mitigate specific threats to projects at risk
- Identifying, structuring and closing preservation transactions in Ohio
- Providing technical assistance to potential owners and managers of at-risk housing
- Conducting a collaborative policy effort to engage tenants, owners, community organizations, government officials and financial institutions in affordable housing preservation efforts, including the convening of a statewide Housing Preservation Summit for all stakeholders
How is the MacArthur Foundation Involved?
The Compact submitted a proposal to the John D. and Catherine T. MacArthur Foundation, which through their "Window of Opportunity" program seeks to support efforts to preserve affordable rental housing. The MacArthur Foundation defines this action as:
"Affordable rental housing is preserved when an owner acts to keep rents affordable for low- and moderate-income households while ensuring that the property stays in good physical and financial condition for an extended period."
The MacArthur Foundation awarded funding amounts between $1 million and $5 million to 12 states and cities in February 2009. The Compact succeeded, as it was one of only two recipients who received the highest funding amount.
What initiatives is the Ohio Preservation Compact undertaking with this financial award?
Ohio has seen a steady increase in demand for affordable rental housing partially due to an unemployment rate consistently higher than the national average and more recently, the exponential rise in foreclosures throughout rural and urban communities. Over the next ten years, Ohio faces the potential loss of a significant amount - nearly a quarter (43,000 units) - of its subsidized rental housing stock.
The grant will fund the creation of a comprehensive, web-accessible database of all federally subsidized properties and enhance outreach efforts to property owners and tenants. The Compact will undertake a comprehensive analysis of the newly collected data to generate profiles of properties with impending subsidy contract expirations to prioritize its preservation activities. This clearinghouse of information on federally subsidized properties will allow various parties, including tenants and affordable housing developers, to identify and evaluate prospective preservation opportunities.
The program-related investment will help establish a preservation loan fund to provide nonprofits and for profit developers with low-cost acquisition and predevelopment financing. Administered by OCFC, the preservation loan fund will be a revolving fund initially capitalized at $18,000,000. Flexible underwriting guidelines, including below-market interest rates, will allow less well-capitalized nonprofit organizations to compete with market investors to purchase properties with expiring rental subsidy contracts.