Naturally Occurring Affordable Housing (NOAH)
What is NOAH?
According to ULI, NOAH is:
Naturally occurring affordable housing (NOAH) is housing that is affordable without being supported by public subsidies such as low-income housing tax credits. NOAH’s market-rate affordability derives mainly from its age—most units were built 40 to 50 years ago—and lack of amenities: it is no-frills, functional housing that is nonetheless safe, secure, and inhabitable.
CoStar’s study found that over one-third of all housing units in the country are actually NOAH units. While NOAH units are an increasingly attractive option for affordable housing as public funding tightens, investment pressures are coming into play to upgrade these units into market rate units.
Unfortunately, these upgrades can displace current residents who are finding fewer and fewer options are available to them in these urban markets. Hennepin County in Minnesota turned to a creative solution to preserve their affordable housing by providing seed funding for a NOAH fund which will be used to buy apartment complexes before they are purchased by investors and turned into market rate housing.
In an area like ours, with similar investment pressures and a dwindling supply, creatiive outside-the-box thinking like a NOAH fund could be a critical tool for policymakers who want to preserve a diverse housing supply for their citizens.