What Happens to Low-Income Housing Tax Credit Properties at Year 15 and Beyond?

Khadduri, Jill; Climaco, Carissa; Burnett, Kimberly; Gould, Laurie A.; Elving, Louise

doi:10.2139/ssrn.2169370

Cited by 24 publications

(16 citation statements)

References 25 publications

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“…All LIHTC properties have an initial compliance period, where ownership is established as a limited partnership between a general partner and investors. At the end of this initial compliance period, the limited partnership has an interest in ending its ownership because the investors no longer receive a benefit from the partnership and are also no longer subject to Internal Revenue Service penalties for noncompliance with the program (Khadduri, Climaco, Burnett, Gould, & Elving, 2012). For those LIHTC properties built before 1990, this is also the point at which the property is relinquished of any affordability restrictions through the LIHTC program.…”

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

“…For those LIHTC properties built before 1990, this is also the point at which the property is relinquished of any affordability restrictions through the LIHTC program. At the end of the initial subsidy period, these properties’ owners often take one of four paths: (a) recapitalize and remain affordable; (b) remain affordable with no additional subsidy; (c) increase rents; or (d) convert to homeownership (Khadduri et al, 2012). In 1989, the federal government amended the LIHTC program to extend the affordability restriction to 30 years instead of the original 15-year restriction period (Begley, Brazil, Reina, & Weselcouch, 2011).…”

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

“…Thus far, properties that have exited the LIHTC program, meaning those built before 1990, have largely remained affordable (Khadduri et al, 2012; Schwartz & Meléndez, 2008). In this article, we focus specifically on properties that have ended their initial compliance period, did not recapitalize through the LIHTC program, and did not receive another form of subsidy from another federal program, despite having to remain affordable for an additional 15 years.…”

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

“…Whereas these three options are not mutually exclusive because of subsidy layering on properties, the first option alone could tie up a large share of future LIHTC funds. As a result, one study suggests that agencies looking to preserve LIHTC subsidies should set clear guiding principles, carefully examine housing markets, and pay attention to repositioning properties at risk of increasing rents or converting to homeownership (Khadduri et al, 2012). …”

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

See 3 more Smart Citations

Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Lens

Reina

2016

Housing Policy Debate

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Rent burdens are increasing in U.S. metropolitan areas while subsidies on privately owned, publicly subsidized rental units are expiring. As a result, some of the few remaining affordable units in opportunity neighborhoods are at risk of being converted to market rate. Policy makers face a decision about whether to devote their efforts and scarce resources toward developing new affordable housing, recapitalizing existing subsidized housing, and/or preserving properties with expiring subsidies. There are several reasons to preserve these subsidies, one being that properties may be located in neighborhoods with greater opportunity. In this article, we use several sources of data at the census tract level to learn how subsidy expirations affect neighborhood opportunity for low-income households. Our analysis presents several key findings. First, we find that units that left the project-based Section 8 program were – on average – in lower opportunity neighborhoods, but these neighborhoods were improving. In addition, properties due to expiry from the Section 8 program between 2011 and 2020 are in higher opportunity neighborhoods than any other subsidy program. On the contrary, new Low-Income Housing Tax Credit (LIHTC) units were developed in tracts similar to those where LIHTC units are currently active, which tend to be lower opportunity neighborhoods.

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Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

Section: Prior Research On Neighborhood Opportunity and Housing Subsimentioning

confidence: 99%

See 2 more Smart Citations

Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Lens

Reina

2016

Housing Policy Debate

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show abstract

“…State QAPS involve a competitive process that prioritize projects that will serve the lowest income families and remain affordable for the longest period of time (Ellen, Horn, Kuai, Pazuniak, & Williams, 2015). Through the QAP process, prioritized units must remain affordable for 30 years and have pre-determined rent ceilings and rental units; however, some have noted that transitions are possible at year 15 (Abt Associates Inc et al, 2012). …”

Section: Introductionmentioning

confidence: 99%

The impact of the low-income housing tax credit on children's health and wellbeing in Georgia

Ports

Rostad

Luo

et al. 2018

Children and Youth Services Review

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Housing instability is a risk factor for child abuse and neglect (CAN). Thus, policies that increase availability of affordable housing may reduce CAN rates. The Low Income Housing Tax Credit (LIHTC) program is the largest affordable housing policy initiative in the country. This study used fixed-effects models to estimate the relationship between LIHTC units and county-level CAN reports in Georgia from 2005 to 2015, controlling for county demographic characteristics. One-way fixed-effects models (including only county fixed-effects) demonstrated significant negative associations between number of LIHTC units and substantiated cases of CAN and total reports of sexual abuse. In two-way fixed-effects models (including county and year fixed-effects), LIHTC units were not associated with any of the outcomes. The findings are subject to limitations, including voluntary provision of CAN data, suppressed data for counties with < 10 CAN cases, and no assessment of the quality of LIHTC neighborhood. LIHTC may be a promising prevention strategy, but more research is needed.

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Low-Income Housing Development, Poverty Concentration, and Neighborhood Inequality

Freedman¹,

McGavock²

2015

J. Pol. Anal. Manage.

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Considerable debate exists about the merits of place-based programs that steer new development, and particularly affordable housing development, into low-income neighborhoods. Exploiting quasi-experimental variation in incentives to construct and rehabilitate rental housing across neighborhoods generated by Low-Income Housing Tax Credit (LIHTC) program rules, we explore the impacts of subsidized development on local housing construction, poverty concentration, and neighborhood inequality. While a large fraction of rental housing development spurred by the program is offset by a reduction in the number of new unsubsidized units, housing investment under the LIHTC has measurable effects on the distribution of income within and across communities. However, there is little evidence the program contributes meaningfully to poverty concentration or residential segregation. C 2015 by the Association for Public Policy Analysis and Management.

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What Happens to Low-Income Housing Tax Credit Properties at Year 15 and Beyond?

Cited by 24 publications

References 25 publications

Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

Preserving Neighborhood Opportunity: Where Federal Housing Subsidies Expire

The impact of the low-income housing tax credit on children's health and wellbeing in Georgia

Low-Income Housing Development, Poverty Concentration, and Neighborhood Inequality

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