Salem Launches Innovation Program to Preserve Existing Rental Stock

Salem Mayor Dominick Pangallo today announced that the City has launched a new program to help preserve multi-family rental housing in Salem. The “Right of First Refusal” (RFR) initiative utilizes funds from the City’s American Rescue Plan Act (ARPA) to offer the owners of residential rental properties a one-time payment of $1,000 in return for the City being provided a right of first refusal should the property ever be put up for sale.

Property owners who enter into an RFR agreement with the City consent to notify the City of the terms that they are willing to accept for their property, before listing the property for sale. The offered terms must be reasonable and comparable to the market. The City has 120 days to accept the terms, after which time the owner can then move forward with publicly listing the property for sale.

“Salem has many buildings that offer affordable rents when compared to newer homes,” explained Mayor Pangallo. “These naturally-occurring affordable rental units are vulnerable to increases in rent, tenant displacement, or conversion to higher price condo units when they are sold on the open market. The RFR program enables the City to attempt to acquire, at market rate, such properties should they ever be put up for sale by the property owner. The City would then work in collaboration with partner agencies to preserve the affordable rental units and attempt to minimize the displacement of existing residents.”

Around 48% of Salem residents are low to moderate income, and 42% of those residents spend more than half of their take-home income on housing costs, leaving little income for other necessities, such as food, clothing, transportation, and medical costs. This places a large number of Salem residents at high risk for housing instability, which results in an increased frequency of moves and evictions, as well as higher rates of homelessness.

The City of Salem is now accepting applications from eligible and interested property owners who would like to enter into an RFR Agreement. The RFR is not a requirement to the sell the property to the City or to anyone. It is only triggered if the property owner decides to sell the property. Applications for RFR Agreements, as well as more information about eligibility and program details, can be found at www.salemma.gov/mayors-office/pages/right-first-refusal-program