Preserving NOAH as an Anti-Displacement Strategy

Authors:
Taesoo Song, Assistant Professor; Virginia Tech School of Public and International Affairs
Carolina Reid, Faculty Research Advisor

Most lower-income renters in the United States don’t live in subsidized housing. They live in older, privately owned apartment buildings that have lower rents, generally due to either quality or location. This housing stock is often referred to as Naturally Occurring Affordable Housing, or NOAH.^[1] NOAH is the largest source of affordable housing in the United States, and preserving this housing stock is essential as cities face rising rents and displacement pressures.^[2]

Because NOAH properties are privately owned, a sale can quickly change the terms of tenancy. New owners may raise rents—for example, to cover higher property taxes or mortgage interest costs, renovate units to attract higher-paying tenants, or bring in new management. For existing tenants, any of these changes can lead to higher housing cost-burdens, moves, or even eviction and displacement.

In a recent article published in the Journal of the American Planning Association, we conducted the first study to look at the impact of NOAH property sales on residential instability.^[3] The study examines NOAH property transactions between 2000 and 2023 in the East Bay and Los Angeles regions.^[4] In this study, we define NOAH as multifamily residential buildings with five to 49 units that were built before 1990: these buildings tend to have lower rents and are often the focus of affordable housing preservation efforts.

We found that NOAH transactions are a common occurrence: nearly 50 percent of NOAH properties in the Los Angeles and East Bay regions changed hands between 2010 and 2023, with sales peaking in 2021 amid the COVID-19 pandemic (Figure 1). This increase in sales is consistent with research showing that pandemic-era rent shortfalls created financial stress for many smaller-scale landlords, prompting some to sell their properties.^[5]

Figure 1. Number of NOAH properties sold by building size, 1995–2022.Source: Authors’ analysis of parcel-level assessor data from Lightbox.
Notes: Total number of NOAH properties in the sample is 29,809.

We also found that NOAH property ownership is shifting from “mom and pop” landlords to professional investors (Figure 2).^[6] From 1990–1999, the majority of sellers and buyers of NOAH were nonprofessionals.  In comparison, from 2010 onward, professional investors accounted for 70 percent of all NOAH purchases.

Figure 2. NOAH sales by last market sale year and transactor type.Source: Authors’ analysis of parcel-level assessor data from Lightbox.
Notes: Professional investors are defined as those who are either (a) identified as a corporation using name matching or (b) who have bought or sold at least three NOAH properties over any 10-year period.

We found that these sales substantially raise the likelihood that a tenant will move out. On average, after accounting for household, neighborhood, and property characteristics, a NOAH sale increases the probability that a tenant moves out by about 30 percent,^[7] suggesting that NOAH sales overall may be an important mechanism shaping housing instability.  We also found that the risk that a tenant moves is higher when the property is sold to a professional investor. Although we can’t see whether these moves are voluntary or involuntary, in high-cost markets or neighborhoods with rapidly rising rents, these moves could deepen housing insecurity for low-income renters.

These findings underscore the need for strategies to preserve the affordability of NOAH properties. Small-site acquisition and preservation models—in which community land trusts and/or nonprofits purchase NOAH properties and maintain their affordability over the long term—are a promising tool, but public financing for them remains scarce. California’s Foreclosure Intervention Housing Preservation Program (FIHPP), established in 2021 to help nonprofits acquire and preserve small, at-risk properties, was defunded before any funds were deployed. Local and regional funds—including San Francisco’s Small Sites Program and the Bay Area Preservation Pilot Fund (BAPP)—provide promising models, but lack the resources to operate at scale.^[8]

A complementary, less capital-intensive strategy is to stabilize the small, community-rooted landlords already providing below-market housing before they are forced to sell. These owners often lack the capital and technical assistance available to larger landlords. The Local Rental Owners Collaborative (LROC), a pilot launched in South Los Angeles in 2021, illustrates this approach. LROC pairs flexible capital and repair support with peer learning and hands-on technical assistance. During its pilot phase, the program helped 52 owners stabilize nearly 200 rental units, prevented displacement for 288 tenants, and strengthened owners’ capacity to keep rents affordable.

This study also highlights the need for more research on NOAH. We know very little about the mechanisms behind the higher rates of residential mobility we observed.  Some sales could have minimal tenant impact, while others could be prompting evictions, rent increases, or shifts in property management—each with different implications for displacement risk. Future research should also examine NOAH sales and their outcomes across different market contexts, evaluate the effectiveness of preservation strategies like small-site acquisition and landlord supports, and assess how tenant protection policies shape whether NOAH remains affordable after a sale. As NOAH properties continue to change hands, better data and evidence will be central to understanding—and sustaining—the affordability this stock provides.

Read the full article.

Endnotes

^[1] Although this term has gained prominence in policy and practitioner circles, it is important to note that the term “natural” is problematic, erasing the private property market practices—including discrimination and wealth extraction—that lead to the concentration of lower-cost, substandard homes in often lower-income, disinvested, and Black and Brown neighborhoods.

^[2] Estimates from various reports suggest that NOAH properties account for anywhere between 70 percent and 80 percent of affordable housing units in the United States and, in one analysis of Los Angeles, tend to be concentrated in lower-income communities of color. See: https://www.mckinsey.com/industries/public-sector/our-insights/preserving-the-largest-and-most-at-risk-supply-of-affordable-housing.

^[3] The analysis combines American Community Survey (ACS), parcel-level assessment data from Lightbox (https://www.lightboxre.com/data/lightbox-vision), Dewey residential rental listing data, and household residential history data from Data Axle (https://www.data-axle.com/data-solutions/consumer-data).

^[4] Although some NOAH may be in smaller properties (such as duplexes), we focused on these buildings because these are the focus of emerging NOAH preservation policies in California. Using Dewey residential rental listing data (https://www.deweydata.io/doi/10-82551-5mmv-7m10), we find that NOAH mean rents are between 10 percent and 30 percent lower than non-NOAH rents in the same location over our study period.

^[5] Decker, N. (2021). The Uneven Impact of the Pandemic on the Tenants and Owners of Small Rental Properties. Terner Center for Housing Innovation, University of California, Berkeley. Retrieved from: https://ternercenter.berkeley.edu/research-and-policy/pandemic-impact-tenants-owners-small-rental-properties/ .

^[6] Professional investors are defined as those who are either (a) identified as a corporation using name matching or (b) who have bought or sold at least three NOAH properties over any 10-year period.

^[7] All the models show a significantly heightened risk of tenant moves, but the estimates vary from about 25 percent to 65 percent based on the modelling approach and geographic area.

^[8] Economy, C., et al. (2024). Addressing the Housing Needs of Low-Income Households in the Bay Area: The Importance of Public Funding. Terner Center for Housing Innovation, UC Berkeley. Retrieved from: https://ternercenter.berkeley.edu/research-and-policy/bay-area-housing-public-funding/.