Affordable Housing, Community Development, Federal News, Reports and Publications

LIHTC Properties Able to Maintain Affordability After Compliance Period

 

Promising news from a new study indicate that even after Low Income Housing Tax Credit (LIHTC) properties have reached the end of their tax credit compliance period, many still continue to provide affordable housing. The U.S Department of Housing and Urban Development’s Office of Policy Development and Research released a paper – What Happens to Low Income Housing Tax Credit Properties at Year 15 and Beyond? - that looked at how affordable LIHTC properties are in the long term.

The study looked at properties that began using LIHTC between 1987 and 1994 and are now no longer subject to income and rent restrictions. The findings show that the majority of these properties have not made significant changes to their rents and are still affordable. Some of that can be attributed to the fact that the housing market those properties are located in would not be able to sustain higher prices and the fact that the LIHTC maximum rent is higher than the local market rents in those areas. 

The few properties that are located in low poverty areas however, were more likely to convert to market rate once their compliance period is over.  Due to this, the authors of the report suggest that Housing Finance Authorities should institute policies to identify and preserve properties that are likely to convert to market rate.

Click here
for a full summary of the report.

The complete study is available here.

 
 

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