Conversions of multifamily dwellings to ‘mansions’ leading to dwindling affordable stock

Small multifamily homes have historically provided inexpensive housing for renters and buyers, but developers have converted many of them in recent decades into larger, single-family units. This has worsened the affordable housing crisis, say researchers.

These buildings, commonly called “triple-deckers, two-flats, or brownstones,” provide historical context and add character to urban neighborhoods along with affordability. Nationwide, low-cost rentals have vanished by more than half a million units per year between 2014 and 2018, according to a report from the Harvard Joint Center for Housing Studies (JCHS). New York City alone, lost more than 100,000 homes since 1950 due to conversions of multifamily buildings into single-family “mansions,” according to a report by Dwell.

Many of these buildings supply what is termed “naturally occurring affordable housing (NOAH)”—unsubsidized units rented at relatively low rates. A 2021 McKinsey report found that NOAHs constitute the nation’s largest category of affordable housing units, and that has prompted legislative action to preserve them in some cities.

For instance, in 2021 Chicago’s city council passed two ordinances to discourage developers from eliminating NOAH in two neighborhoods. Developers face up to $15,000 (or $5,000 for each lost unit) for tearing down or converting multifamily buildings.

Preserving older NOAHs takes more than laws, though, it requires someone to spend money to keep them in working order. According to a recent JCHS report, the median unit in small multifamily structures was built 54 years ago. That’s nine years older than the typical single-family home. NOAHs also “face significantly higher quality and structural issues” than your average single-family house, the JCHS report says.

ICAST (International Center for Appropriate and Sustainable Technology) has released a resource guide to help multifamily owners and managers, policymakers, utilities, energy efficiency program implementers, and others advance the deployment of VHE heat pump HVAC and water heaters in multifamily housing.