The Case for Rental Housing - A Nonprofit Perspective

Unmet demand for affordable rental housing in most U.S. housing markets represents an opportunity for nonprofit organizations. Despite the potential benefits available through affordable rental housing creation and preservation, nonprofits still need to carefully assess their internal and external environment to determine whether they are well suited to enter this business. This paper identifies and assesses the internal and external drivers that shape decisions made by organizations in this field and that are often critical to successful projects. These drivers were identified through a review of relevant literature, interviews and focus groups with leading policymakers and practitioners, and analysis of survey responses from NeighborWorks America organizations.

The most important factors considered in decisions to enter and remain in the affordable rental housing business are market conditions, organizational mission, and the contribution of a project to a nonprofit's financial bottom line. Findings also indicate that the state of many of the internal and external factors that affect organizations' decisions in this field are not static, but can be shifted in a more optimal direction. Strategies that describe how to create a better environment in which to conduct an affordable rental business are also offered in this paper and include partnerships and long-term planning. Suggestions are made for nonprofits already in or considering entering the affordable rental housing line of business; potential partners, both nonprofit and for-profit; and policymakers, funders and regulators of affordable rental housing.