The Low-Income Housing Tax Credit program has helped create more than 3 million affordable housing units across the country. But if something isn’t done soon, thousands of those homes could be lost forever as affordability periods expire.
Last April, seniors who lived in rent-restricted units at the Sierra Ridge apartment complex in Clovis, California, were told that their rents would double by January 2022. Rent for a one-bedroom apartment would increase from $591 to $1,295 a month, management said, and a two-bedroom unit would go from $699 a month to around $1,400.
Although 20 percent of the units at Sierra Ridge had been subject to long-term affordability requirements that prohibited such increases, those conditions officially came to an end in early 2021.
Sierra Ridge was built in 1990 as one of numerous properties in the U.S. constructed using the Low-Income Housing Tax Credit (LIHTC) program, which provides tax incentives for the building, rehabbing, or purchasing of affordable housing. The development is comprised of a mix of market-rate and affordable units, the latter of which, like all other LIHTC-funded units, must remain affordable for 30 years, after which property owners are allowed to rent those units at prices the market will bear. The LIHTC program was created in 1986 and made permanent in 1993, meaning that many of those first LIHTC units are beginning to see those 30-year affordability restrictions expire.
It’s estimated that by the end of the decade, nearly half a million LIHTC-funded housing units will reach the end of their affordability period. “When these affordability restrictions go away, a lot of people lose the dignity of being able to afford living on their own,” says Marcos Segura, a staff attorney at the National Housing Law Project.
These properties are also at risk of falling into disrepair as property owners often need money for major renovations by the end of their affordability period, money that isn’t available without a new source of funding.
Are there any mechanisms in place to protect residents who live in these properties? What can housing advocates and public officials do now to preserve the affordability of those LIHTC units, and the ones to be built in the future?
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FULL STORY: What Can Be Done When LIHTC Affordability Restrictions Expire?
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