The Low-Income Housing Tax Credit (LIHTC) program has helped create over 3 million affordable housing units across the U.S., but as the affordability periods for these units expire, thousands of homes are at risk. For example, residents at Sierra Ridge in Clovis, California, faced rent increases from $591 to $1,295 for a one-bedroom apartment after the affordability restrictions ended in 2021. LIHTC properties, which must remain affordable for 30 years, are increasingly reaching the end of their affordability periods, with nearly half a million units expected to expire by the decade’s end. To combat this, housing advocates and policymakers are exploring several strategies. Early intervention between years 15 and 20 of a LIHTC property’s life cycle can extend affordability protections through comprehensive renovations funded by new tax credits. States like Vermont require perpetual affordability for new projects to ensure long-term affordability. Additionally, states can incentivize longer affordability periods and prioritize nonprofit or public ownership of LIHTC properties, reducing the risk of market-rate conversion.

Effective tracking and data collection are crucial for identifying properties nearing the end of their affordability period and planning preservation efforts. In some cases, states mandate advance notices to tenants about expiring affordability, as seen in California. Public-private partnerships, like the Austin Housing Conservancy in Texas, aim to preserve long-term affordability through innovative funding models that attract private investment while maintaining housing for moderate-income households.

Ultimately, preserving LIHTC properties’ affordability requires a combination of proactive policies, accurate data, and sufficient funding to address both market-rate conversions and potential disrepair, ensuring that affordable housing remains available for future generations.

https://nextcity.org/urbanist-news/what-can-be-done-when-housing-affordability-restrictions-expire