Danger of the Opt-Out: Strategies for Preserving Section 8 Project-Based Housing in Philadelphia

Community Legal Services calls for action to preserve affordable housing for low-income tenants.

PHILADELPHIA – (RealEstateRama) — A report detailing affordable housing at risk of being lost due to owner opt-out was released by the Justice Lab clinic at the Stephen and Sandra Sheller Center for Social Justice at Temple University Beasley School of Law and Community Legal Services (CLS). In response to the report, CLS is calling on the Department of Housing and Urban Development, City of Philadelphia, and the Philadelphia Housing Authority to take action to protect affordable housing for low-income tenants in the City.

This report, based on the Justice Lab’s analysis of subsidized, project-based housing properties at risk of owner opt-out, where those units will no longer be affordable, finds that over 9,000 units of affordable housing are at risk of loss in the next 20 years.  This loss of housing has a distinct racial impact, where 63% of African-Americans live in project-based housing compared with 44% of the city’s population, and where African-Americans are disproportionately more likely to carry severe housing cost burdens in the city.

According to the report:

• Over 9,000 units of affordable housing may be lost in the next 20 years across 86 Section 8 project based properties
• 18 of those properties are in gentrifying census tracts, which are at greater risk of opt-out due to changing neighborhood demographics. Of the 21 properties with contracts expiring by 2020, six are located in a gentrifying tract.
• A majority of affordable units are at higher risk of opt-out due to the owner’s for-profit status – a profit-motivated owner is more likely to opt-out when they are able to obtain higher rents on the private market.

The report provides several recommendations to address the risk of opt-out. Recommendations include stronger, lengthier notice requirements to housing advocates, tenant associations, and the City itself. The report also recommends the creation of an online database of pending contract terminations or mortgage prepayment.

“Loss of affordable housing affects entire communities, not just low-income individuals,” said Community Legal Services attorney Rasheedah Phillips. “Preserving economic and racial diversity in areas impacted by gentrification and redevelopment means increased access to opportunities in one’s own neighborhood, stable families, and integrated communities.”

As the Justice Lab report notes, any loss of affordable housing in the City creates long-term harmful effects on tenants and neighborhood stability. Loss of affordable housing exacerbates racial and socioeconomic inequity and discourages economic diversity in rapidly redeveloping neighborhoods in our City.

Added Community Legal Services attorney Rachel Garland, “We must explicitly address racial inequity in decisions made around preservation of affordable housing, and utilize creative strategies to address preservation of affordable housing in both disinvested neighborhoods and neighborhoods targeted for gentrification.”

Click here to read the report.

About Community Legal Services, Inc.:

Community Legal Services, Inc. was established by the Philadelphia Bar Association in 1966. Since then, CLS has provided legal services to more than one million low-income Philadelphia residents, representing them in individual cases and class actions, and advocating on their behalf for improved regulations and laws that affect low-income Philadelphians. As the city’s largest provider of free legal services, CLS assists more than 11,500 of Philadelphia’s poorest residents with their legal problems each year. For more information, contact 215-981-3700 or visit www.clsphila.org.

Source: Community Legal Services of Philadelphia