The Preservation Paradox
"Which came first, the chicken or the egg?" - Plutarch
Most of us dismiss this ancient (!!!) paradox without fully engaging with it. We tell ourselves it’s just a silly riddle, it’s not important – but the truth is, it’s too uncomfortable to face the fact that we just don’t know. So, we toss it aside and move on to something easier, something “more important.”
The same thing happens when we look at affordable housing preservation. It's too hard. The system is too broken. Move on to something we can wrap our heads around.
But we can no longer afford to look away – “the chickens are coming home to roost.”
The Preservation Paradox
Our existing affordable housing stock is on a dangerous financial trajectory, but it’s hard to justify rent increases without making the repairs and upgrades that residents expect. Likewise, it’s hard to fund repairs and upgrades if buildings are losing money, which also means you can’t easily refinance.
So, which comes first? Rehab? Stabilization? Decarbonization?
The Path of Least Resistance
When we stay with the paradox and zoom out to a systems perspective, a counterintuitive pathway begins to emerge.
What we call “decarbonization” – a.k.a. mechanical, electrical and plumbing systems upgrades – typically represent ~30 - 50% of a property’s total physical needs. In LA, incentives for decarbonization come with no-cost Technical Assistance and are awarded on a first-come-first-served basis – they're not competitive in the same way as tax credits or other traditional funding sources. And when you combine all the incentives, you can get 50% - 100% of your decarbonization costs reimbursed when the project is complete.
Well, what about the upfront cost? CDFIs can provide bridge financing; philanthropic dollars can fill gaps; and, going back to the Venn Diagram, making these upgrades delivers huge co-benefits for residents, like access to cooling, better indoor air quality, and maybe most important – a sense that they are being invested in.
Resolving the Preservation Paradox
In the words of Alan Watts, "[a] chicken is just one egg's way of becoming other eggs." Which is a poetic (and funny) way of telling us there must be an answer, but we will never know for sure – so all that’s left is to dance with the not knowing, and do our best to move toward what is true and good.
Decarbonization offers a logical starting point to resolving the Preservation Paradox, inviting residents into conversation, addressing a good chunk of a building’s needs, activating the enabling environment, and building trust – which is the foundation for progress.
Moving together in this way, we create space for the emergence of novel community investment models that will carry us into the future we choose.