Housing affordability remains one of the most pressing challenges for cities across the United States. As housing prices outpace incomes and the supply of deeply affordable units dwindles, communities must adopt innovative, long-term strategies to prevent displacement and ensure equitable access to housing.
As a company that focuses on preserving affordability in underserved markets throughout the country, we are aware of the challenges developers and municipalities face to deliver much-needed affordable housing in these markets. From high construction costs and interest rates to community pushback, the headwinds are strong—yet not insurmountable. We have identified several strategies that are especially effective, including extending affordability restrictions, fostering public-private partnerships, and converting existing market-rate units into permanently affordable housing.
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1. Extend to preserve
Owners focused on affordable housing are increasingly finding creative solutions to maintain affordability at their properties amids expiring restrictions. These projects typically involve affordability covenants or regulatory agreements that ensure rent restrictions remain in place for decades, preserving critical housing stock for low- and moderate-income residents. Successful preservation allows for continued operation of assets that benefit from low turnover, on-time rent payments and long waitlists.
An example of this is Wellington Woods, a 360-unit affordable housing community in Kissimmee, Fla., that Avanath has owned since 2013. The regulatory agreement on the property was scheduled to expire at the end of 2024, and the firm extended its affordability for years by restricting rents to those who earn up to 80 percent of area median income. By extending the regulatory agreement, Avanath preserved the real estate tax abatement. This move also allows the firm to access lower financing rates.
This asset management and affordability preservation strategy has proven to be a useful tool in preventing displacement and stabilizing communities, especially in high-cost markets where affordable housing is under constant pressure.
Alternately, some owners may opt sell their properties to buyers who then commit to maintaining or extending affordability restrictions. Rather than pursuing the highest possible price on the open market—which often results in conversions to market-rate housing—these sellers are prioritizing long-term affordability by selecting mission-aligned buyers, including nonprofit developers, community land trusts and socially responsible investment groups.
By working with buyers committed to preserving affordability, sellers can pass the baton to entities that will continue serving vulnerable populations, while also receiving fair compensation for their assets.
2. Leverage public-private partnerships
Public-private partnerships continue to play a central role in preserving affordability. These collaborations combine the resources and strengths of public entities—including funding, regulatory support and land—with the capital and expertise of private developers and community organizations.
Options like the Low-Income Housing Tax Credit program are instrumental in incentivizing private-sector investment in affordable housing. However, to deepen affordability, communities are now coupling these traditional tools with innovative mechanisms such as income averaging, which allows developments to serve households across a broader range of incomes while meeting overall affordability targets.
Baldwin Village is an excellent example of a successful public-private partnership that is preserving affordability. Our firm acquired the 669-unit family workforce housing community in Los Angeles as a joint venture with the Housing Authority of the City of Los Angeles and Kaiser Permanente and is converting 70 percent of its units to affordable housing, serving residents earning between 60 percent and 80 percent of AMI. Through the collaboration, the community is eligible for a California tax exemption for properties that serve tenants at 80 percent AMI or lower.
Another powerful model is the use of social impact investment funds that focus specifically on affordability preservation. These funds often partner with municipalities and nonprofits to identify at-risk properties, provide patient capital for acquisitions and guarantee affordability for decades. Their success depends on nimble coordination between local governments, mission-driven investors and residents who have a stake in maintaining community stability.
3. Repositioning existing housing
While new affordable housing development is critical, preserving and converting existing housing stock offers a faster and often more cost-effective solution. Many communities are beginning to recognize the opportunity in acquiring naturally occurring affordable housing—older market-rate rental units that are relatively low-cost but increasingly at risk of conversion to luxury rentals or condominiums.
Strategies such as mission-driven acquisitions—in which nonprofit developers or community land trusts purchase existing market-rate housing to maintain it as affordable—are gaining momentum. These efforts are particularly impactful when public agencies provide low-interest loans, acquisition financing or pre-development grants to reduce upfront costs and make deals feasible for nonprofit buyers.
For example, cities like Minneapolis and Denver have launched dedicated preservation funds to support the purchase of vulnerable NOAH properties. By acting quickly and targeting properties in gentrifying areas, these programs help retain affordability and stabilize communities before displacement occurs.
Affordable conversions can have significant financial benefits for owners. In Long Beach, Calif., our company converted Seaport Village, a 358-unit multifamily community, into affordable housing via the California Municipal Finance Authority’s Charitable Housing Program. A minimum of 40 percent of the units will be income and rent restricted at 80 percent AMI, presenting annual tax savings ranging from $700,000 to $1 million.
As housing affordability challenges intensify, cities must expand beyond traditional development models to preserve what is already in place. Extending affordability restrictions, maximizing public-private partnerships, and converting existing market-rate units are excellent strategies toward this end.
Ultimately, preserving and extending housing affordability will require bold, coordinated efforts among governments, developers, nonprofits and residents. But with strategic planning and targeted investment, communities can create sustainable, inclusive neighborhoods where affordability is not the exception—but the foundation.
John Williams is president & COO at Avanath Capital Management.
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Gillian Executive Search is a leader in Affordable Housing Development, Financing, Design and Construction recruiting. www.gessearch.com