)
Hundreds of thousands of affordable rentals could convert to market-rate housing in the next five years because of expiring tax credits, according to a new study.
Around 180,000 units built with the federal government’s Low-Income Housing Tax Credit will be eligible to become market-rate housing by 2027, The Wall Street Journal reported, citing Moody’s Analytics data.
Without new agreements or new subsidies, the owners of 100,000 units annually, starting this year, could remove the income restrictions and dramatically raise rents.
“When these properties are exiting the program, there’s no legal avenue to force them to stay in it,” Kevin Rabin, director of litigation at Three Rivers Legal Services, a Florida legal aid organization, told the WSJ.
The loss of affordable housing will hit hard across the country, but is likely to be particularly acute in parts of the U.S. that have seen massive jumps in rent. The loss will be felt hardest in Dallas, which could lose about 1 in 5 of its tax-credit apartments in the next four years, per Moody’s. Chicago and Houston will be similarly affected.
The Biden administration has called for the extension of LIHTC deadlines so affordable housing projects that were paused by public health, supply chain and economic issues can be built “as expeditiously as possible” without losing qualification for the incentive.
Bills have been introduced to both the House of Representatives and the Senate to expand the number of tax credits that are offered, but they haven't yet moved forward.
The expirations could exacerbate the country's dire lack of rental housing. The U.S. has a shortage of 7.3 million affordable housing units, according to the Urban Institute, a gap that has increased by 8% since 2019.
As of this year, the average U.S. apartment rents for roughly 30% of the median American wage, meaning the average renter in the country is rent-burdened, The New York Times previously reported.
)
)
)
)
)
)
)
)
)
)
)
)