When some people hear the term “affordable housing,” they think of public housing projects and vouchers. But those options only scratch the surface.

“JPMorgan Chase takes a multi-pronged approach to tackling the housing crisis. We not only help finance new affordable housing construction, but also work to preserve naturally occurring affordable housing by financing multifamily residential rental properties that maintain low rents without federal subsidies,” said Ed Ely, Head of Commercial Term Lending at JPMorgan Chase.

By keeping their properties affordable for teachers, firefighters, healthcare workers and other members of the working class, property owner/operators can reap many benefits—including financial incentives from JPMorgan Chase.

The increasing demand for affordable housing

There’s a continued need for affordable housing across the U.S., and it grew when COVID-19 hit. That demand spans extremely low-income to middle-income households.

However, middle-income renters—households earning 80%-100% of the area median income (AMI)—are often overlooked. Unlike households earning above the AMI, they can’t afford market-rate rental housing. And middle-income renters don’t qualify for the government housing subsidies that low-income households do. Few programs protect these households from rising rental costs.

*Data encompasses Los Angeles and Cook Counties and Washington, DC. Rents assume tenant pays utilities. Source: Federal Housing Finance Agency, January 2021

Tax exemptions and abatements

Some cities and counties offer tax incentives to building owners who preserve affordable housing. For example, the Multiple-Unit Limited Tax Exemption Program in Portland, Ore., awards projects with a property tax exemption on structural improvements. And Washington, D.C., offers a tax abatement on qualifying properties reserved for low-income households.

Provide economic security

Although homeowners across the country struggle to find secure, well-maintained housing in their price range, housing affordability problems are more than twice as common among renters than homeowners.¹

In 2019, 46.3% of renter households were cost-burdened (spending more than 30% of their incomes on rent and utilities), including 23.9% with severe burdens (spending more than 50%).

When people aren’t burdened with housing costs, they’re able to spend money elsewhere in the community—at local grocery stores, doctor’s offices or neighborhood shops.

Preserve communities

“Preserving affordable housing is really about protecting the livelihood and vitality of cities,” Stuart said.

For example, it’s linked to lower crime rates and increased health and education outcomes for children, plus increased purchasing power, tax revenues and job creation, Ely said.

Secure, decent housing can promote better health. It gives households improved access to healthcare, transportation, jobs and vibrant communities. Affordable housing also has broader community benefits.

Affordable and workforce housing also helps preserve the character of neighborhoods. People gravitate toward cities because of their unique, diverse communities with local restaurants, coffee shops, stores and other businesses. Affordable and workforce housing can help preserve the character of neighborhoods.

“In reality, people working to help a neighborhood thrive often can't afford to live there without access to affordable housing,” Stuart said.

JPMorgan Chase’s affordable housing preservation program

On top of these benefits, JPMorgan Chase has an Affordable Housing Preservation program. Through the program, qualified clients can preserve affordability in a portion of their existing subsidized multifamily properties in exchange for a pricing incentive that lasts the life of their loan. The program has preserved more than 35,000 apartment units to date and the firm has surpassed its $2.5 billion goal for 2021, Ely said.