As the Low-Income Housing Tax Credit (LIHTC) approaches its 30th anniversary, national accounting and consulting firm Novogradac & Company LLP has released a report on the beneficial effects of America’s most important and successful affordable housing production tool.
The LIHTC serves low-, very-low and extremely low-income renters. The Novogradac Low-Income Housing Tax Credit Showcase explains how LIHTC works and who lives in the affordable rental homes financed by the credit. The report also describes various types of LIHTC properties and looks at the credit from the perspective of residents, state housing agencies, developers, investors and syndicators. The Novogradac Low-Income Housing Tax Credit Showcase also profiles 72 LIHTC developments in 34 states and territories.
The report provides summary data to illustrate LIHTC’s impact over its 30-year lifetime:
- $100 billion in private equity capital to finance quality affordable apartments since the tax credit’s inception.
- 2.71 million homes built due to LIHTC from its inception through 2012.
- 90,000-95,000 apartment units built annually due to LITHC.
- .62% foreclosure rate for LIHTC properties over the history of the program.
When looking at who lives in LIHTC properties, Novogradac found:
- 45% of residents’ incomes are at or below 30% of Area Median Income.
- 19% are between 30 and 40% of AMI.
- 17% are between 40 and 50% AMI.
- 13% are between 50 and 60% of AMI.
- 6% are at or above 60% of AMI.
- 36% of LIHTC housholds have had at least one member under 18 years old.
- 33% of households have had an elderly member.
“For 30 years, the LIHTC has helped America’s less-fortunate citizens find quality, safe, affordable housing and this report highlights why and how it works,” said Michael J. Novogradac, CPA, managing partner in Novogradac’s San Francisco office. “As one developer says, the LIHTC is the ‘sun that all the other affordable housing programs revolve around.’ This report shows how that happens–and it also highlights the benefits to the nation as a whole.”
Peter Lawrence, Novogradac’s director of public policy and government relations in Washington, D.C., said the special report comes at a crucial time. “As Congress considers significant tax reform, this showcase reminds us of how successful the LIHTC has been for decades,” he said. “People all over the nation have had their lives enriched by housing that was built only because of the LIHTC. In light of its achievements, it makes sense for Congress to consider an increase in LIHTC resources to help meet the tremendous need and demand for affordable rental housing.”
The Joint Center for Housing Studies of Harvard University reported last month that the share of U.S. households that rent is at its highest level since the mid-1960s following an unprecedented decade-long surge in rental demand, meaning the need for affordable housing is greater than ever. The Novogradac report shows how the LIHTC helps meet that need.