Naturally Occurring Affordable Housing (NOAH) refers to existing housing that remains affordable without public subsidies or legally imposed affordability restrictions.
NOAH units may fall into one of the following categories:
- Newly built units that enter the market at affordable price points, such as small-scale multifamily developments, manufactured homes, or ADUs in lower-cost areas.
- Existing units that have become affordable due to market shifts, such as aging rental properties, reduced investor demand, or economic downturns that lower prices or rents.
- Stable-price units that become affordable as AMI levels increase, where home prices or rents remain unchanged, but higher income thresholds make them newly affordable.
When to Count NOAH Units
To be counted toward Proposition 123 compliance, NOAH units must be a new (or newly converted/preserved) housing unit, added to a jurisdiction’s housing stock after the date of a local government’s commitment filing, and remain affordable at or below 60% AMI for rental units or 100% AMI for ownership units by the end of the commitment cycle.
NOAH units must demonstrate affordability through market analysis, sales records, or rent documentation. Unlike Affordable units, which are made Affordable through an affordability mechanism, NOAH units remain naturally affordable without formal restrictions.
If a NOAH unit later in the cycle receives a formal affordability mechanism, it should instead be categorized under Preservation rather than counted as NOAH.
Rental Housing NOAH
To qualify as NOAH under Proposition 123, a rental unit must be affordable to households earning at or below 60% AMI without relying on formal affordability restrictions. Instead, affordability is demonstrated through sustained rent analysis or tenant income certification, ensuring that the unit remains within the affordability threshold.
NOAH rental projects typically include privately owned rental properties where rents remain naturally affordable. In some cases, market-rate units have remained affordable due to natural market forces, rather than through public subsidies or legal affordability requirements. Larger multifamily buildings may also qualify when affordability is sustained through market conditions rather than formal deed restrictions.
Ownership Housing NOAH
To qualify as NOAH under Proposition 123, an ownership unit must be affordable to households earning up to 100% AMI without relying on resale restrictions or affordability covenants. Affordability is demonstrated through sales price analysis, buyer income verification, or historical sales data, ensuring that the home remains within reach for income-qualified buyers.
NOAH ownership projects often include affordable ownership units in stable housing markets, where home prices have remained naturally low without formal affordability requirements. Some homeownership programs maintain affordability through market-based pricing, ensuring accessibility for future buyers without enforcing resale restrictions. In certain cases, manufactured housing units offer continued affordability, even without deed-restricted affordability requirements.
Housing Needs Assessments as a Resource
Jurisdictions required to complete a Housing Needs Assessment (HNA) under SB24-174 may find opportunities to streamline NOAH verification by leveraging data collected through the HNA process. While NOAH compliance under Proposition 123 and HNA data collection are governed by separate statutory requirements, both processes rely on market-based affordability analysis to assess existing housing conditions.
HNA methodologies, such as ownership and rental market analysis and displacement risk assessment, can support NOAH tracking by identifying naturally affordable units that remain at or below 60% AMI for rental units and 100% AMI for ownership units. Jurisdictions may choose to align data sources—such as ACS, HUD CHAS, and local market surveys—to improve efficiency in monitoring NOAH trends while maintaining compliance with both statutes.
For more details on HNA requirements, refer to the Colorado Housing Needs Assessment Guidelines.