New Report Highlights Significant Risks for Affordable Rural Housing
Recently, the Housing Assistance Council (HAC) released a
report analyzing affordable, rural rental housing across the country. A key finding of the report is estimating that an average of 1,788 units will leave USDA’s Section 515 Rural Rental Housing Program each year until 2027 as their mortgages mature, and almost all of the rest of the portfolio may follow. Currently, the Section 515 program finances over 13,000 rental properties with over 415,000 affordable homes for families and individuals across rural America. Overall, the report provides a comprehensive analysis of rural multi-family housing challenges and the urgent need to develop strategies that preserve this portfolio.
New Reports Focus on LIHTC Development Costs
This week, the Government Accountability Office (GAO) released a
report on Low-Income Housing Tax Credit (LIHTC) development costs. The report provides an assessment of total development costs in LITHC properties across 12 housing finance agencies in 10 states between 2011 and 2015. Overall, the GAO found wide disparities in development costs across different housing markets. The GAO also made several recommendations to IRS and Congress on improving cost certification practices, data collection, and treatment of syndication fees.
The recommendations include:
- Congress should consider designating an agency to regularly collect and maintain specified cost-related data from credit allocating agencies and periodically assess and report on LIHTC project development costs.
- IRS’s Associate Chief Counsel, in consultation with Treasury’s Assistant Secretary for Tax Policy, should require general contractor cost certifications for LIHTC projects to verify consistency with the developer cost certification.
- To help allocating agencies analyze development cost trends and drivers and make comparisons to other agencies, IRS’s Commissioner of the Small Business/Self-Employed Division should encourage allocating agencies and other LIHTC stakeholders to collaborate on the development of more standardized cost data, considering information in this report about variation in data elements, definitions, and formats.
- IRS’s Associate Chief Counsel, in consultation with Treasury’s Assistant Secretary for Tax Policy, should communicate to credit allocating agencies how to collect information on and review LIHTC syndication expenses, including upper-tier partnership expenses.
In anticipation of the GAO report, the National Council of State Housing Agencies NCSHA released an independent
analysis, conducted by Abt Associates, that found “on average, Housing Credit development costs are roughly the same as development costs for typical multifamily apartments, despite the additional federal requirements that Housing Credit developments are subject to.” The GAO report did not compare LIHTC development costs to market-rate development costs, due to limited availability of market-rate data. Please find find NCSHA’s
side-by-side comparison of the GAO report and the Abt Associates study.
UP NEXT: What NAHMA is watching for next week
- Congressional leaders negotiate HUD and USDA Fiscal Year 2019 funding or a potential short-term funding measure ahead of the September 30th deadline
- NAHMA staff participate in a “Rural Summit” in the U.S. Senate
- NAHMA staff participate in PennDel AHMA’s Management Conference
