Community Preference Policy

Several cities and nonprofit organizations across the United States are utilizing community preference policies for their affordable housing programs to redress prior racial injustices (such as displacement precipitated by urban renewal and freeway construction), further their displacement mitigation goals, and help stabilize communities. These policies are typically created at a neighborhood scale and provide priority placement for affordable units in a neighborhood or group of neighborhoods to low-income applicants who have been displaced from their neighborhood, are current residents at risk of displacement, or are descendants of displaced residents. Preference policies do not actually produce affordable units but instead provide preference for units that are produced by other means. A resident receiving a community preference must still meet the affordable housing program’s eligibility requirements, such as specific income limits.

Austin’s Guadalupe Neighborhood Development Corporation is a longstanding community development organization providing affordable rental and homeownership opportunities and working to prevent displacement of vulnerable residents in several East Austin neighborhoods. GNDC’s community preference policy gives priority on GNDC’s housing waitlists to applicants with historic ties to the neighborhood and who are vulnerable to displacement. For home sales, GNDC has six different levels of priority, with the highest priority given to current tenants and then to applicants who have lived in GNDC’s service area for 25 or more years.

On a larger scale, the City of Portland’s N/NE Neighborhood Housing Strategy employs a community preference policy in several neighborhoods of N/NE Portland, with a focus on remediating displacement based on urban renewal, which displaced more than half of the area’s Black community. The City uses a system of preference points to move people to the top of the waitlist. The highest priority is given to families who owned property taken by the City through eminent domain for urban renewal projects. For the next tier, applicants are awarded points based on the location of their residence and whether their parents, guardians, or grandparents lived in the area. The initial implementation of Portland’s policy hit some rough spots and offers lessons for other communities. For example, the eligibility criteria for different affordable housing programs was poorly communicated to applicants who applied for housing preferences, only to find out they did not meet the income requirements.

A preference policy must be carefully crafted to avoid violating the Fair Housing Act by ensuring that the policy does not perpetuate segregation or have a disparate impact on persons of color or other protected classes (such as families with children or persons with disabilities). For example, if a preference policy prioritizes current residents of a neighborhood and the residents who qualify for the affordable housing program are more likely to be white compared to a program serving applicants drawn from a larger geographic area, the policy could be considered to have a disparate impact under the Fair Housing Act. To avoid disparate impacts in gentrifying neighborhoods that are becoming predominantly white but were historically communities of color, a city should consider giving preference to low-income residents who are at the highest risk of displacement (such as renters), have long ties to the community, or have already been displaced. Each preference policy should be carefully tailored to the particular community and regularly reviewed for compliance with the Fair Housing Act.