Mismanagement Leads to Loss of up to $35M for DC Affordable Housing

The Washington, D.C. Department of Housing and Community Development forfeited $3.5 million in 2023 Low-Income Housing Tax Credits (LIHTC), which amounts to $35 million in lost funding over 10 years, reports Suzie Amanuel in Washington CityPaper.

According to Amanuel, “[The credits] are the biggest source of federal affordable housing funding in the nation. Developers can apply for the highly competitive 9 percent credits, which offer a substantial subsidy covering approximately 70 percent of eligible costs—those are the credits DHCD forfeited this year.”

Because the LIHTC program has strict deadlines for funds disbursement and project completion, agencies usually have around two years to use each year’s allocation. A 2024 tax document submitted by DCHD to the IRS reveals “reveals evidence of sloppiness and internal inconsistencies.” 

As Amanuel explains, “The massive forfeiture of 2023 credits is due, in part, to a “credit swap” used to bail out a well-connected developer’s troubled project.” The agency swapped 20203 credits for 2020 credits when Buwa Binitie’s Cascade Park Apartments had cost overruns. “This administrative catastrophe creates a tangible barrier for local affordable housing developers who rely on these credits to finance new projects or save deteriorating properties, according to multiple developers who spoke with City Paper on the condition of anonymity for fear of retaliation.”