Investments in this strategy aim to increase residential stability by strengthening the quality of housing, adding renter protections to reduce risk of eviction, and increasing access to resources like good schools, healthcare, grocery stores, and public transportation. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.
In many developed economies, lower income households move residences at vastly higher rates than their middle- and upper-income counterparts. Of course, not all moves are problematic; families may move into larger homes, onto nicer blocks, or just a small distance down the road to access better education, food, or healthcare. For those who are forced to leave their homes, however, residential instability can have deep and long-term negative effects. Investments in this theme can improve residential stability by:
Taking 30% of income as a standard for housing affordability, the number of cost-burdened U.S. households overall has been estimated at around 39 million (5). This number includes about 48% of renters. Poorer children, in particular, are almost twice as likely to experience acute residential instability, on average moving six times more often than their wealthier counterparts before adulthood. Residential instability most likely impacts those individuals living below or near the poverty line in a given area (3). Financial instability is the most common cause of moves, and a lack of savings or disposable income often makes moves all the more challenging for a household.
While this strategy has many potential beneficiaries, with the specific intended beneficiaries varying by investor preference, unstable housing conditions in many developed markets primarily affect the following individuals, who are therefore more frequently targeted:
Children: Frequent moves can disproportionately affect children due to the associated requirement to shift schools and the emotional and physical stress associated with developing new routines and patterns (1, 2). Children who face housing instability at critical times in their development often experience harmful physical and mental health outcomes later in life.
Very Low-Income Individuals: While members of all socioeconomic strata face negative consequences from residential instability, those living below the poverty line are both more susceptible to residential instability and less prepared, because of their lower levels of wealth and savings, to use capital to buffer the negative impacts of a move on themselves and their families (2).
Housing instability is most prevalent in areas with high concentrations of low-income individuals or where median income is low and cost of living is high. Often, moving frequencies are higher in urban areas because cities have sufficient housing stock to accommodate moves. The negative impacts of housing instability are also often felt most acutely in urban areas, where moves of even relatively minimal distance can lead to significant changes in residents’ lives (e.g., a new school system or neighborhood).
The extent to which this strategy can address residential instability depends on the particular affordable housing project and the nature of the housing brought to market. Housing accessibility requires units that are physically, financially, and intellectually accessible to their intended beneficiaries. Housing resulting from investments that work to mitigate the challenges that beneficiaries face related to residential instability—by considering household finances, protecting tenants from undue eviction, offering access to necessary services, and providing higher-quality housing—will likely be better for beneficiaries than housing options that are already available.
All developed economy countries struggle to some extent with this issue, though to varying degrees. For example, half of all U.S. households below the poverty line moved at least once between 2005-2010, and the number of cost-burdened households there has been estimated around 39 million (2,5). Investors seeking to reduce residential instability as a means of delivering impact may consider investing in affordable housing units that target families or individuals with less than 30% of area median income (AMI). Overall, the number of potential beneficiaries of this investment strategy is limited only by the number of individuals living without housing stability in a particular region (2).
The amount of change beneficiaries experience greatly depends on the housing product, as well as any services or additional support offered. Examples of change aligned with this strategy include:
CommonBond Communities is the Midwest’s largest affordable housing provider, uniquely focused on providing resident services concentrated on youth achievement (8). Along with the Bishop’s Creek Community Development Corporation, CommonBond preserved Glenbrook Apartments in a high-priority revitalization area in Milwaukee, Wisconsin, rehabilitating 72 units with new appliances, central air units, and energy-efficient windows. These apartments were targeted for preservation because of their close proximity to schools, day care, and bus lines. As part of the renovation, CommonBond built an Advantage Center that provides academic programs ranging from after-school tutoring for youth to continuing education classes for adults. Youth who participate in CommonBond’s onsite academic and social programs graduate from high school at higher rates, CommonBond has shown, than the general population. In addition to providing supportive services, such as educational support and healthcare, CommonBond strives to retain tenants for extended periods of time before transitioning them to other, sustainable and stable sources of housing depending on each family’s needs and income.
Heather Sandstrom, and Sandra Huerta. The Negative Effects of Instability on Child Development: A Research Synthesis. Washington, DC: Urban Institute, September 2013. https://www.urban.org/research/publication/negative-effects-instability-child-development-research-synthesis
Matthew Desmond, Carl Gershenson, and Barbara Kiviat. “Forced Relocation and Residential Instability among Urban Renters.” Social Service Review 89, no. 2 (June 2015): 227–62. h”$”:https://doi.org/10.1086/681091
G. Thomas Kingsley, Audrey Jordan, and William Traynor. “Addressing Residential Instability: Options for Cities and Community Initiatives.” Cityscape: A Journal of Policy Development and Research 14, no. 3 (2012): 161–84. https://www.huduser.gov/portal/periodicals/cityscpe/vol14num3/Cityscape_Nov2012_addr_res_insta.pdf
Margot B. Kushel, Reena Gupta, Lauren Gee, and Jennifer S. Haas. “Housing Instability and Food Insecurity as Barriers to Health Care Among Low-Income Americans.” Journal of General Internal Medicine 21, no. 1 (January 2006): 71–77. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1484604/
Joint Center for Housing Studies. The State of the Nation’s Housing. Cambridge, MA: Harvard University, 2017. http://www.jchs.harvard.edu/research/state_nations_housing
Chris Walker. Affordable Housing for Families and Neighborhoods: The Value of Low-Income Housing Tax Credits in New York City. Local Initiatives Support Corporation (LISC) and Enterprise Community Partners, June 2010. http://www.lisc.org/our-resources/resource/low-income-housing-tax-credits-prove-valuable-nyc
John T. Cook, Stephanie Ettinger de Cuba, JoHanna Flacks, Deborah A. Frank, Annie Gayman, Elizabeth L. March, Alan F. Meyers, Samantha Morton, and Megan Sandel. “Rx for Hunger: Affordable Housing.” https://www.issuelab.org/resource/rx-for-hunger-affordable-housing.html
“About Our Affordable Housing.” CommonBond Communities. http://commonbond.org/about-our-affordable-housing/
This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.
Margot B. Kushel, Reena Gupta, Lauren Gee, and Jennifer S. Haas. “Housing Instability and Food Insecurity as Barriers to Health Care Among Low-Income Americans.“ Journal of General Internal Medicine 21, no. 1 (2006): 71-77.
Kai A. Schafft. “Poverty, Residential Mobility, and Student Transiency within a Rural New York School District.“ Rural Sociology71, no. 2 (2006): 212-231.
Janet M. Fitchen. “Residential Mobility Among the Rural Poor.“ Rural Sociology 59, no. 3 (1994): 416-436.
Lisa Melman Heinlein, and Marybeth Shinn. “School Mobility and Student Achievement in an Urban Setting.“ Psychology in the Schools 37, no. 4 (2000): 349-357.
Rachelle Levitt. “Evidence Matters: Transforming Knowledge into Housing and Community Development Policy Fall 2014.” (2014).
Scott Schieman. “Residential Stability and the Social Impact of Neighborhood Disadvantage: A Study of Gender- and Race-Contingent Effects.“ Social Forces 83, no. 3 (2005): 1031-1064.
Kristin Turney, and Kristen Harknett. “Neighborhood Disadvantage, Residential Stability, and Perceptions of Instrumental Support Among New Mothers.“ Journal of Family Issues 31, no. 4 (2010): 499-524.
Emma K. Adam. “Beyond Quality: Parental and Residential Stability and Children’s Adjustment.“ Current Directions in Psychological Science 13, no. 5 (2004): 210-213.
Joint Center for Housing Studies of Harvard University. “State of the Nation’s Housing 2017.” 2017. http://www.jchs.harvard.edu/research/state_nations_housing
Kathleen M. Ziol-Guest and Claire McKenna. “Early Childhood Residential Instability and School Readiness: Evidence from the Fragile Families and Child Wellbeing Study.“ Center for Research on Child Wellbeing Working Paper 2009-21-FF(2009).
Matthew Desmond, Carl Gershenson, and Barbara Kiviat. “Forced Relocation and Residential Instability among Urban Renters.“ Social Service Review 89, no. 2 (2015): 227-262.
Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.
Number of housing units constructed as a result of investment by the organization during the reporting period.
Organizations should footnote all assumptions that went into calculating or counting new units, as well as the sources of their data.
The total number of new units constructed should be easily accessible from the developer or architect of the project. Depending on the nature of the investment vehicle, mandated reporting against this metric by the project developer may merit inclusion in a terms sheet to guarantee high-quality, timely data. Organizations should count new units as complete at the conclusion of their construction—meaning at the point when they could reasonably be occupied.
This metric is essential to understand the scale of potential impact delivered by the investment. New units of housing are necessary in order to deliver on outcomes related to the affordable occupancy of these units.
Number of housing units rehabilitated or preserved as a result of investment by the organization during the reporting period.
Organizations should footnote all assumptions that went into calculating or counting preserved or rehabilitated units, as well as the sources of their data.
The total number of rehabilitated/preserved affordable housing units should be easily accessible from the project developer or management company. Depending on the nature of the investment vehicle, reporting against this metric by the project developer or management company may merit inclusion in a terms sheet to guarantee high-quality, timely data.
Like the number of units of affordable housing, this metric is essential to understand the scale of the potential impact delivered by the investment. Preservation and rehabilitation of new units are necessary in order to deliver on outcomes related to the affordable occupancy of these units.
Number of individuals housed or projected to be housed in single-family or multi-family dwellings as a result of new construction, loans, repairs, or remodeling resulting from investments made by the organization during the reporting period.
Organizations should footnote whether they are reporting on the number of individuals housed or the number of individuals projected to be housed. For reasons related to the structure of the investment vehicle, organizations may prefer and choose either. Organizations should also footnote the source of the data.
These data should be available at an individual investee level; if not, it can sometimes be found from public sources (depending on source of funding for the housing development). Household-level data per decade are also available in the United States via the Census.
This metric captures the number of individuals who are provided housing in this unit. Measuring against this metric helps to articulate the performance of the product (housing, in this case). Constructed/preserved units are useful as a means of delivering impact only insofar as they are occupied. Ideally, this metric can also be understood alongside potential individuals housed by a project as a means to understand occupancy rate.
Indicates whether the organization implements policies to protect its clients.
Organizations should footnote details on the types of policies it implements.
This data should be available at an individual investee level. If it is not directly available from the investee, it can sometimes be found through public sources. Example policies that an organization might have in place to protect its clients may include: rent collection policies, internal audits to check practices that could increase indebtedness, eviction policies, employee training practices, resident response policies, and late payment penalty processes.
This metric is intended to capture the policies the project puts in place to protect its residents from unnecessary sources of residential instability. This metric shows how successfully projects are laying policy groundwork for stable and long-term periods of residency.
Ratio between the number of tenants involuntarily removed from the housing unit, compared to the total number of permanent tenants during the reporting period.
Organizations should footnote whether the individuals have left their units to shelters or other supportive housing structures.
This metric is intended to capture the ratio between individuals removed from the affordable housing because of their inability to pay rent and utility costs. This data should be collected directly from the management company or building management.
Investors focused on more permanent, stable housing may consider using measurements of eviction. If the eviction rate is high in a particular development, it may indicate a need for investors and management companies to consider how they can better achieve long-term stability to avoid further eviction—possibly through provision of additional or different supportive services.
Ratio between the number of tenants departing the housing unit and the average number of permanent tenants during the reporting period.
Organizations should footnote whether the individuals have left their units to other affordable or market-rate housing, or whether their exit is unknown.
This metric is intended to capture the ratio between individuals exiting affordable housing and the total number of individuals housed in all units. These data should be collected directly from the management company or building management.
Investors focused on more permanent, stable housing may consider using turnover measurements. If the eviction rate is high in a particular development, it may indicate a need for investors and management companies to consider how they can better achieve long-term stability to avoid further eviction—possibly through provision of additional or different supportive services.
Number of formerly incarcerated individuals housed in single- or multi-family dwellings as a result of new construction, loans, repairs, or remodeling resulting from investments made by the organization during the reporting period.
Organizations should footnote the source of their data, as well as all assumptions used in their calculations.
This metric is intended to capture either a) the number of formerly incarcerated families provided affordable housing as a result of the investment, or b) the number of formerly incarcerated individuals provided affordable housing as a result of the investment. Investors should footnote whether they choose to measure at a family or an individual level. Organizations may also want to report this metric alongside the total number of individuals/families housed as a means of understanding what proportion of their investee’s residents were formerly incarcerated. Collection of these data likely relies on a long-term relationship with the investee. A short-term debt investor may find it challenging to capture this metric.
Investors interested in working to reduce recidivism may choose to capture this metric, which indicates performance toward the outcomes and impacts outlined in the logic model. If the strategy selected by the investor relies on converting incarcerated individuals to affordably housed individuals, this metric is a key performance indicator.
Number of formerly homeless individuals housed in single- or multi-family dwellings as a result of new construction, loans, repairs, or remodeling resulting from investments made by the organization during the reporting period.
Organizations should footnote the source of their data, as well as any assumptions that went into calculating this metric.
This metric is intended to capture either a) the number of formerly homeless families provided affordable housing as a result of the investment, or b) the number of formerly homeless individuals provided affordable housing as a result of the investment. Investors should footnote whether they choose to measure at a family or an individual level. Organizations may also want to report this metric alongside the total number of individuals or families housed as a means to understand what proportion of their investee’s residents were formerly homeless. Collection of these data likely relies on a long-term relationship with the investee. A short-term debt investor may find it challenging to capture this metric.
This metric indicates the level of success at providing housing for homeless individuals. If the strategy selected by the investor relies on converting homeless individuals to housed individuals, this is a key performance indicator.
The types of supportive housing services linked to affordable housing developments as of the end of the reporting period.
Organizations should footnote details of the supportive services, ideally outlining key performance indicators for each.
This qualitative metric is intended to capture the scope of the services offered by the affordable housing development during the reporting period. The type of each supportive service should be collected at the end of each reporting period.
Investors interested in providing resources to support continued housing stability for formerly homeless individuals—e.g., life skills training, mental and physical healthcare centers, alcohol and substance abuse treatment, or vocational programs—may use this metric to track the provision of those services. Supportive services in and of themselves do not indicate performance toward outcomes and impacts. However, this qualitative metric can indicate whether an investee has begun to consider the role that supportive services can play in retaining and advancing beneficiaries of their project.
Number of reports issued to the local police or enforcement office regarding issues of domestic abuse.
Organizations should footnote the type and number of each sort of violation. Organizations should also footnote the source of their data, as well as any assumptions that went into calculating this metric.
This metric is intended to capture the unique number of reports to the police or local enforcement agency from the housing project or development. These data may be challenging to capture. While most management companies will have records of domestic abuse reported on their premises, they may not track or aggregate that data. Data may also be available from the municipality, depending on the location.
Investors focused on reducing homelessness related to domestic violence may choose to track this metric, which is an imperfect indicator of the extent of domestic abuse in a particular area. Comparison to a baseline of domestic abuse in shelters and among homeless populations may also indicate performance toward the goal of reducing domestic abuse.
Percentage of a household’s income that is spent on rent/mortgage and utilities (including heat, water, electricity, and cooling).
Spending on Rent, Mortgage, and Utilities / Total Household Income
Organizations should footnote the source of their data, as well as any assumptions used in calculating total income and spending on rent/utilities.
Unless a management company requires their tenants to regularly report their income (not common), this metric is often based on the income recorded for the threshold requirement at the time of application for occupancy. Spending on rent/mortgage and utilities should be accessible to the management company.
Investors interested in decreasing the cost burden for end beneficiaries at risk of housing instability may want to track this metric, which indicate expenditures on rent/mortgage and utilities, along with Client savings (PI748, below). Percent of household income spent on housing can be compared to the 30% suggested baseline for spending on rent/mortgage and utilities as a share of income.
Average cost savings per client obtained by renting or purchasing an affordable unit compared to the average price that client would otherwise pay for a unit during the reporting period.
Average cost of market-rate unit per individual ? Average cost of affordable unit per individual
Organizations should footnote the source of their data, as well as any assumptions used in calculating the cost of the market rate and affordable units.
This metric relies on assumptions for the average cost per client for affordable and market-rate housing. When calculating the market-rate alternative, organizations should use an average from the surrounding area that they deem appropriate, footnoting assumptions. Cost of affordable housing per unit can most often be accessed through the management company.
Investors interested in decreasing the cost burden for end beneficiaries at risk of housing instability may want to track this metric, which indicates savings as a result of affordable housing, along with Percent of household income spent on rent/mortgage and utilities during the reporting period (above).