Preserving affordable housing makes economic sense

Owners of Penn Plaza, an apartment building in the East Liberty neighborhood of Pittsburgh, recently handed out eviction notices to residents of its 321 units, of which 41 are affordable under Section 8 and the rest rent at below-market rates. The eviction notices came without any mention of relocation assistance (although they did remind residents to ‘have a nice day’).

This story reminds me of Chicago’s Lawrence  House, where more than 300 residents were evicted by FLATS Chicago to make way for fancy market-rate studios. While FLATS did have a relocation team on staff to assist residents in finding new housing, the team was (according to all tenant reports) unhelpful. Rather than showing listings of local affordable buildings, explaining what subsidies are available, or connecting residents to non-profit housing search organizations, relocation staff provided tenants with a list of urls for generic sites such as Craigslist, Apartment Finders and Domu, none of which specialize in affordable housing.

The lack of compassion shown by FLATS in Chicago, and by the owners of Penn Plaza in Pittsburgh (and countless other buildings across the country, I am sure) drives me crazy. Throwing people onto the street (especially those who are veterans, elderly, disabled, low-income) is unconscionable. Doing so without providing any safety net, any resources, contributes to increasing homelessness and is a drain on public funds. A study by the Heartland Alliance Mid-America Institute on Poverty showed that providing housing for at risk populations creates an average saving of $2,414 per person per year, compared to living on the street and requiring services such as hospital stays, prison and jail time, and drug/ alcohol treatment programs.

I understand the owners of the buildings are just trying to practice good business: if you own property in a developing neighborhood, you want to get as much money as possible out of your investment; if that property is currently rented at below-market value, the only (seeming) recourse to maximizing return is to evict current, resource-poor tenants and open the doors to new, resource-rich tenants.

Except that there are options for creating this transition from low- to market-rate rent with compassion. First, owners can ensure there are units available for current residents who will not be able to afford higher rents. It is possible to work with city officials to ensure there is enough housing available, and to create a transition plan with help from politicians and social-service agencies. In Pittsburgh, State Rep. Ed Gainey did not hear about the Penn Plaza evictions until residents began calling his office for help; he still doesn’t know the details of the redevelopment plans. Second, owners can utilize government subsidies, such as Low-Income Housing Tax Credits (LIHTC) and other local grants, which offset the cost of renovation and ensure that new units are affordable. Use of government subsidies does not (as many owners may fear) mandate that all units are affordable; LIHTC, for example, provides different rates for different percentages of affordability. Utilizing assistance like this not only helps low-income residents, but creates community support (especially needed if owners want a zoning change that requires a vote).

Keeping people in housing just makes sense, both from an economic and a societal standpoint. There is no benefit to increasing homelessness. Even if it looks like less expense in the short term, the associated costs of leaving people without shelter add up quickly and contribute to budget crises and increasing taxes. People do not disappear simply because they have no roof over their head and no room to call their own. They may disappear into the shadows but they will continue to impact their communities, even from the margins.


  1. Here in the District of Columbia, we have our own version of the Penn Plaza issue. The difference is that local law gives tenants a right to purchase the building and a source of public funds that can help, when the money’s there. The law has thus far prevented the owner from getting everybody out. And tenants are getting a lot of public support, as well as support from some of our elected officials.

    Here’s a recent article you might want to look at:

    • aravitz12 says:

      Thank you for sharing that article with me. It is amazing what can be achieved when activists and tenants band together for community support. I wish more communities supported tenants’ rights to their homes and their neighborhoods. I hope the tenants at Museum Square are able to save their building.

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