Housing credit properties are performing well across-the-board, including large, small, urban, and exurban projects, according to a new report from CohnReznick. The NH&RA member released recently “The Low-Income Housing Tax Credit Program: A Performance Update Analysis,” which is part of a larger effort to measure the economic performance of housing tax credit projects.
This report is the third in a series that examines the performance of LIHTC-funded properties and funds organized to own interest in housing tax credit properties. According to CohnReznick, the report’s notable findings include:
- Physical Occupancy – Occupancy rates have increased across the country since 2009.
- Debt Coverage Ratio – Improved financial performance continues. The average housing credit projects in all 50 states and territories are operating above breakeven.
- Per-Unit net cash flow – Cash flow, while still modest in amount, has continued to improve; doubling over the last six years.
- 4% tax credit properties are performing as well as 9% credit properties.
- Properties set aside for senior tenants outperformed the overall portfolio by all measures in 2011 to 2012 (occupancy, DCR and per-unit cash flow).
- Only 18.6% of properties operated below 1.00 DCR in 2012; as recently as 2002 this figure was 35%.
- Larger properties (101-200 units/property) had the lowest incidence of underperformance.
- Financial performance was more heavily influenced by geographic location than any other factor.
Click here to read the full report.