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New regulations, expected to be announced Monday, will cap annual rent increases at 10% in properties funded by the Low-Income Housing Tax Credit program.
There are more than 1 million homes in the U.S. that are LIHTC-financed, but it’s unclear how many of them would face double-digit rent increases, according to the Washington Post. Affordability requirements already affecting these properties “make it difficult for rents to climb 10 percent in a year,” the Post reported.
Tenant advocates that cheered the move were focused less on how many units would be spared by the new rule and more on the message that the move sends.
National Tenant Union Federation Director Tara Raghuveer told the Post that she was bolstered by the tying together of federal funding and tenant protections.
“The Biden administration should expand such protections to federal financing — the biggest subsidy for multifamily housing in this country,” Raghuveer said.
But groups such as the National Housing Conference and the Mortgage Bankers Association felt that the cap would add yet another limitation to the obstacles that affordable housing developers must overcome to build subsidized affordable housing.
“If the administration imposes unworkable rent caps on LIHTC programs, it will severely suppress — if not kill — the program,” MBA president and CEO Bob Broeksmit said in a statement. “Such a move is puzzling and contradicts many of the Administration’s other efforts to increase affordable rental housing.”
There has been some momentum at the federal level to boost the resources of the LIHTC program in an attempt to address the nationwide housing affordability crisis. A bill that would boost the program and allow states to allocate more credits is working its way through Congress, and housing affordability was a major element of President Joe Biden’s State of the Union address in March.
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