Housing groups attract investors with the promise of only modest returns so they can, in turn, keep rents as low as possible.

According to preservation groups, maintaining affordable housing as a for-profit entity is possible, so long as investors don’t need huge returns.Credit…Jesse Barber for The New York Times

ADMIN: This is the type of THINKING OUT OF THE BOX solution to the housing crises that our government should be supporting, not tax incentives to build NEW over-sized housing complexes in traditionally low density residential areas. Over and over we see how developers are cashing in on taxpayer subsidies and tax incentives that help their company or nonprofit’s bottom line while they invade neighborhoods and provide inadequate services to the low-income residents they are supposedly helping. We have to call them out on this when we see it being proposed as the ONLY way to solve the housing crises. Over Building Is Not The Answer!

By Elizabeth A. Harris, New York Times
July 24, 2026

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Mark Ethridge, the managing principal at Ascent Housing, bought an apartment complex this spring in North Charleston, S.C., in a gentrifying neighborhood where the rents are rising fast.

The complex, which has a fitness center and a pool, is zoned for one of the best public schools in the area, and Mr. Ethridge knew he could easily raise the rents by as much as $500 a month.

Instead, the day after the deal closed, he cut the asking rents. Now, they are as much as $500 a month lower.

Ascent is a for-profit company, but profit isn’t the primary goal. Instead, it aims to buy nice apartments in gentrifying areas and keep them affordable. Ascent offers its investors modest returns in exchange for setting rents as low as possible, targeting what’s called naturally occurring affordable housing — homes that are inexpensive not because of vouchers or tax credits, but because of their location or the age of the building.

Mark Ethridge, the managing principal of Ascent Housing.Credit…Jesse Barber for The New York Times

These “naturally occurring” houses and apartments make up the vast majority of the country’s affordable homes, but as prices creep up across the United States, cheap places to live are increasingly scarce. Ascent hopes its approach can work in cities across the country, housing even the lowest-income tenants in buildings that are already there.

“It’s not housing that’s guaranteed to stay affordable for another day. It could change in an instant,” Mr. Ethridge said. “If you live in a city that attracts a lot of investment capital, it’s just a matter of time.”

Many investment funds buy this kind of property and keep them affordable, but once they sell the properties, the period of affordability is usually over. Those funds are often set up to earn double-digit returns for their investors.

Ascent puts deed restrictions and other incentives in place to keep rents low for decades, using a combination of private money and local government support to serve tenants with much lower incomes than most preservation funds are willing to consider. Mr. Ethridge said the majority of their apartments serve people who earn 60 percent of the area median income, or less.

“Preserving affordable housing is one of the most effective and cost-efficient strategies,” said LaShonda McCorkle-Hart, the interim director of Mecklenburg County’s Office of Housing and Community Development. “There are so many properties that could be preserved, if you’re doing it right,” she added.

Ascent’s goal is to buy the nicest properties it can find in gentrifying areas and keep them affordable. Credit…Jesse Barber for The New York Times

Mr. Ethridge, 38, began his career working for a financial services firm, making loans for real estate projects. His clients, he said, “were the nicest people in the world, but their business plan was always to fix the property up a little and raise the rent a lot.” It bothered him. He wondered what would happen to the people who already lived in those apartments.

He joined Ascent, a small local real estate company, and pitched the idea of going out and buying apartments with the express purpose of restricting the rents.

Not long after completing his first affordable project, he got a phone call. Erskine Bowles, a private equity investor and a former chief of staff to President Bill Clinton, along with his business partner, Nelson Schwab, wanted to talk about investing with him. Mr. Ethridge invited them to the Ascent offices just a few days before the pandemic shut down Charlotte, and for two hours, they sat around a conference table pelting Mr. Ethridge with questions.

They joined forces and created the Housing Impact Fund, which has raised $225 million since 2020 and is on track to preserve 3,500 apartments in Charlotte.

Ascent’s investors include major local employers, which have an interest in keeping housing affordable. Credit…Jesse Barber for The New York Times

They set up the fund as a for-profit entity, an approach shared by some other housing preservations groups. AJ Jackson, the president of LEO Impact Capital, which aims to preserve housing for middle income residents like teachers, said because his company offers modest returns, they have access to a broader range of investors.

Mr. Bowles, who has led several nonprofits, including the University of North Carolina system, said he preferred the financial discipline of a for-profit company, but he had other motivations, as well.

“As a lifelong Democrat, I’m tired of being called a socialist,” he said. “I believe in capitalism, but I also strongly believe if capitalism is going to survive, we’ve got to make it work for more people — a lot more people,” he added. “I felt this could be a great example of how you could prove that capital markets and capitalism could make a real difference and meet an enormous need in Charlotte. And if we could prove it worked in Charlotte, perhaps other people in other places would copy it.”

Some of the properties have amenities like a pool or a fitness center. Credit…Jesse Barber for The New York Times

Ascent attracts investors who want to have a social impact, not maximize profits, including local foundations, major local employers — who have an interest in making sure housing stays affordable — and banks that are required to make investments in their communities. Those investors accept a return of about 6 percent and commit to a 20-year investment.

Atrium Health, a hospital system that employs tens of thousands of people in Charlotte, has been one of its main investors. Atrium doesn’t take a return and instead funnels money back into the affordable proprieties, where it employs social workers to organize financial literacy classes, child care, adult education and work force training.

For-profit companies have to pay property taxes, but Ascent has an arrangement with the city of Charlotte and Mecklenburg County to direct its taxes to a nonprofit that converts them into rental subsidies, which are then used at Ascent’s properties.

Most inexpensive housing in the country just happens to be affordable because of the neighborhood or condition of the building. As an area gentrifies, prices can shoot up. Credit…Jesse Barber for The New York Times

This arrangement allows Ascent to be more affordable, setting aside 30 percent of the company’s apartments for people making 30 percent of the area median income or less.

Daniel Warwick, a principal at HR&A who consults with cities, investors and developers on affordable housing, said that level of affordability “is pretty much unheard-of” with this kind of housing preservation.

Aisha Johnson lives at Ascent’s Lake Mist apartment complex in Charlotte, where she pays $312 for a one-bedroom apartment, a short walk from a light rail station and a grocery store. Before she moved to Lake Mist, Ms. Johnson said she was paying $370 a week to live at the hotel where she worked as a housekeeper. It was one room with a refrigerator and a microwave, in a seedy hotel where she wasn’t comfortable having her grandson come visit.

Now, she starts her day sitting on her tidy front porch.

“I wake up, I come outside and I drink my coffee,” she said. “You don’t hear anything but birds chirping.”

Despite Ascent’s success in Charlotte, Mr. Ethridge wasn’t sure it would translate to other cities because he wouldn’t have Mr. Bowles and Mr. Schwab to help him raise money. But in the Charleston area, he found a group of major employers eager to preserve affordable housing and happy to invest money in order to do it.

The mix of private money and local support has allowed Ascent to preserve 500 units so far. Mr. Ethridge said they’re on track to preserve 500 more.

“I’m so much more optimistic that this could happen in any market now because I’ve seen it, without the same people in a completely different environment,” Mr. Ethridge said. “If you know the road map and the playbook,” he added, “you really can harness something special.”

Elizabeth A. Harris covers books and the publishing industry, reporting on industry news and examining the broader cultural impact of books. She is also an author.

See more on: Erskine B. Bowles

COMMENTS

Colorme
I do this already. It makes total sense. If you have an older property it can have lower rents and you can keep long term tenants. Works out for everyone. I only own 3 units though but still – haven’t raised rents in a few years and the last time I raised rent I gave the tenants a full year notice.

Mike
There is method to what seem economic madness (lowering and freezing rents). Why? As a landlord or property owner, all (or most) of your work and costs is on the tenant turnover. That is, renewing the unit, marketing it, showing it, onboarding the new tenant, etc. Plus, you get wear and tear on the move out, checkout issues & even deposit dust ups. Newsflash: these people are staying put. So you will have very little turnover costs. That is huge for keeping management costs down. Plus, people in below market units seldom clamor for new flooring, added carports, or complain and threaten a move if a new amenity or update is not added. They realize the value of functional if dated unit. So your 90’s countertops and cabinets are just fine as long as they function, saving you big in CAP EX (capital expense). Plus, the vacancy rate here, I would guess, is close to zero. Again, a huge cost savings. And your tenants are likely to pay promptly to keep their low rent gems, and this is another benefit (less late or unpaid rent). You save on legal costs and notices, too, with fewer unpaid rent issues. And when you do have a rare vacancy, the quality of applicants will be high, so you will get a good paying tenant that won’t cause problems. In point of fact, a lot of mom & pop landlords do slightly below market rents as a strategy (less costs and headaches) for these reasons. That this company also gets public support and incentives really sweetens the deal: clever strategy!

Callie
Capitalism can work in this way-but only if capitalists have a conscience. Unfortunately, those in the news these days clearly are deficient in that regard; they have instead a surfeit of rationalizations. That isn’t a surprise since capitalism harnesses and relies on one of humanities most prominent characteristics-greed. That is both good news and bad-good because it is a simple and straight forward form of positive reward and bad because without some external control it knows no limits. It is nice to see people with a conscience working within the capitalist system but to keep it from devouring its tail regulation and rules are necessary-no matter what Thiel, Musk, Andreessen, Ackman, Bezos etc. say.

Clarice
Mark Ethridge and Ascent Housing could give lessons to their peers on how they can do something to help communities without driving current residents out of their homes. Good for him and Ascent.

Lu
Now this is a practical, smart, innovative way to promote dignity and self-sufficiency that can only spread as well to the community and future generations That it is succeeding in South Carolina, a traditionally politically red state, is another example of a unifying goal for all political arenas. I hope this story, message and lessons are spread beyond the NYT.