· For people above the LIHTC income limits and below first-time homeownership.
· By converting unsold single-families or condos into apartments at stipulated rent levels.
It was precisely this group of people most victimized by subprime excesses, so restoring them to a secure rental tenure, in workforce housing, would not only address a portfolio problem, it might give them back some measure of social justice.
1. Over-levered markets can turn into properly priced workforce housing. Many of the markets that have large overhangs of unsold condos or neighborhoods struggling with delinquent subprime borrowers are those in greatest need of workforce housing, a need that will not abate.
2. Last time around, the affordability chance was missed. Ironically – or perhaps it's not ironic at all – once before we had the opportunity to capture good conventional properties cheaply for affordable housing, after the S&L debacle, in the Resolution Trust Corporation (RTC) affordability program. But we missed our chance.
3. Government should embrace an affordability objective. Not only is this good long-term government policy (it's much cheaper to buy them now than build them three years hence), it's also sound recovery economics, as rapid execution to an occupied workforce rental tenancy could help stabilize many markets.
4. Affordability proponents must act quickly. We can seize the opportunity if those who seek affordability can come together quickly, and bring both financial and intellectual resources to tackle the restructuring and repositioning required.
For more, see Recap Update 58