on Dec 14, 2023
Beyond the LIHTC: Unveiling a Holistic Approach to Addressing the Nation’s Housing Puzzle
While the federal and state Low-Income Housing Tax Credit (LIHTC) Program has created over 3 million homes since its creation in 1986, and is one of our most powerful tools in addressing our nation’s housing crisis, even the LIHTC isn’t a silver bullet for solving the housing puzzle. HR&A Principal, Callahan Seltzer recently shared her thoughts in this Shelterforce article alongside other national housing experts on some of the unintended consequences of the program and what other tools we need in our ‘housing strategy toolkits’ to provide housing options tailored to community needs.
The LIHTC offers State and local agencies around $9 billion a year in tax credits for the acquisition, rehabilitation, or new construction of rental affordable housing, but the financial infrastructure required to receive these credits often only pencils out for larger-scale affordable housing projects of 100 units or more. “It is really tough to do projects less than 100 units,” Callahan Seltzer shares, “It’s tough for those to even score well [on applications to the state to receive tax credits]. Oftentimes, syndicators, and then, de facto, the investors, aren’t as interested.” Yet, 20- or 30-unit buildings are often what are needed, especially in rural areas.
Callahan also shared an anecdote from an project in Denver, Colorado, which was originally envisioned as a 40- to 60-unit development but was reimagined into a 125- to 160-unit development to secure LIHTC funding.
HR&A is working with visionary clients who want to build new, innovative strategies in addition to the LIHTC, such as the Federal Home Loan Bank of Boston, Southern California Association of Governments, and the Housing Equity Fund, to name a few. Together, we’re exploring a range of options in addition to the LIHTC program that will streamline the production of desperately needed housing for communities around the country. We see this work as essential in the housing industry’s evolution.
Click here to read the full Shelterforce article.