Housing Foundations is a series about the policies, systems and history behind the housing challenges facing Houston and other large metropolitan areas. This post focuses on the role of naturally occurring affordable housing.
This low-cost rental housing is offered by the private market and does not receive federal housing subsidies, despite the fact that most households that rely on NOAH units would be eligible for subsidies. Additionally, these units are more likely to be a preferred destination for housing choice voucher recipients, since NOAH typically offers fair-market rents.
Harris County — like other urban areas across the United States — faces declining availability of NOAH units. Reversing the trend could help maintain affordable housing supply. Preserving these units through acquisition and rehabilitation is also about 20%-30% cheaper than constructing new housing. This is particularly important in keeping affordable housing units in high-amenity areas with quality access to transit.
The NOAH landscape
According to the “Preserving Affordable Housing in Harris County” report published by the Kinder Institute in 2021, NOAH units make up 85% of the area’s affordable housing stock. A significant number of those properties, which were predominantly constructed in the 1970s and 1980s, require repairs.
About 57% of NOAH units in the county are in average or worse condition, with "average condition" denoting typical wear and tear. Units that are average or below may need moderate to extensive renovations in the future, which landlords often find difficult to finance. Upgrading these properties may also result in increased rental costs.
Additionally, rising property values in central Harris County and Houston make NOAH properties subject to gentrification, especially in neighborhoods that offer a wealth of amenities.
Other studies have explained key factors that shape the NOAH landscape.
One is filtering, which occurs when older structures deteriorate (known as structure filtering) or when higher-income families relocate to newer buildings and neighborhoods (referred to as income filtering). These filtering processes lead to a loss of NOAH units due to changes in neighborhoods through reinvestment in communities and an influx of higher-income groups, as does disinvestment, which can lead to neighborhood abandonment.
Another significant factor is tenure conversions, particularly the transition from ownership-based units to affordable rental units during economic downturns, as commonly seen in the 2000s. According to a 2015 report from Harvard University’s Joint Center for Housing Studies, between 2003 and 2013, the national rental market saw an increase of 3.8 million units — predominantly made up of single-family detached homes — that had shifted from ownership status.
It is important to note that the concept of NOAH itself is a point of debate, as this housing stock may arise through an intentional process such as neglect or disinvestment rather than occurring “naturally” as the term suggests.
Pushed out
In 2021 in Harris County, an estimated 398,799 unsubsidized rental units were affordable to families who earned less than or equal to 80% of the HUD Area Median Family Income (HAMFI), which is calculated to determine income limits for HUD programs.[1] For a family of four, that was equivalent to $63,350 per year.
Eight of the 10 Community Tabulation Areas (CTAs) with the highest number of NOAH units for those earning less than or equal to 80% HAMFI are mostly suburban and located outside of or bisected by Beltway 8: Alief, Pasadena, Eldridge/West Oaks, Greenspoint, Gulfton, Westchase, Spring Southwest and Baytown. The other two are Sharpstown and Mid-West.
Neighborhoods with a higher number of NOAH units do not necessarily have more subsidized housing units. For instance, there are no subsidized housing units in the Mid-West or Westchase CTAs. Additionally, the number of NOAH units varies based on income level. For example, Pasadena has more NOAH units available for individuals earning up to 80% HAMFI than Mid-west, while Mid-West has a greater number of NOAH units for those who earn up to 50% HAMFI than Pasadena.
After mapping the spatial distribution of NOAH units across all neighborhoods in Harris County (Figure 1), it is evident that there are relatively few NOAH units located in the inner loop, which offers better amenities and access to public transit.
Gaps and opportunities
Here is a caveat regarding NOAH: It appears and disappears in the private market, making it difficult to assess and manage and for housing policymakers and organizations to preserve and promote.
To preserve NOAH, accurate local data that properly evaluates the physical condition of NOAH units is essential. Ways to preserve these housing units — particularly in high-amenity neighborhoods — need to be explored. At the same time, a clear definition of what qualifies as a NOAH unit eligible for subsidy is needed.
The city of Houston’s tax increment reinvestment zones (TIRZs) could be an effective tool for preserving NOAH. TIRZ programs, a form of value capture to encourage investment in distressed neighborhoods, often devote about 25%-30% of their funds toward affordable housing construction or renovation. For example, the Montrose TIRZ allocated 25% of its budget to support affordable housing within the district, with a strong emphasis on preservation initiatives.
Ultimately, addressing the supply and demand of NOAH is crucial to solving the affordable housing crisis, as these units represent the primary housing stock for low-income households. Collecting more data on the physical condition of these units is a good place to start.
[1] We estimate the number of NOAH units in 2021 in Harris County for 50% HAMFI and 80% HAMFI. According to Kang and Jeon (2021), the total units of NOAH were calculated by subtracting the number of subsidized housing units from the total low-cost housing units. Data on low-cost housing units, defined as rental housing units that cost 30% or less of (1) 50% of HAMFI and (2) 80% of HAMFI, were collected from 2017-2021 Comprehensive Housing Affordability Strategy data. Data on the number of subsidized units was sourced from the National Housing Preservation Database (2021), which was downloaded in 2024. When the number of subsidized housing units exceeds the number of low-cost housing units, NOAH units are assumed to be zero. Specifically, this applies to 46 census tracts for NOAH units at 50% HAMFI and 19 census tracts for NOAH units at 80% HAMFI. Although both datasets are at the census tract level, the data were later aggregated to the neighborhood level, specifically the Community Tabulation Area. Table 1 lists the 10 neighborhoods within Harris County that have the highest number of NOAH units.
[2] The top 10 CTAs are selected and organized based on the ranking of the number of NOAH units for 80% HAMFI.
