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GAO Releases Report on LIHTC Development Costs

Tuesday, September 18, 2018 - 10:45AM

The Government Accountability Office (GAO) today released its study on development costs for low-income housing tax credit (LIHTC) properties. “Low-Income Housing Tax Credit: Improved Data and Oversight Would Strengthen Cost Assessment and Fraud Risk Management” measured development costs of LIHTC properties in 10 states between 2011 and 2015. The GAO report found that the median total development cost per unit in its survey was $204,000–higher than the same number in a recent report by Abt Associates, which is largely attributable to the fact that the Abt Associates report is national and includes 4 percent developments while the GAO report is focused on 10 states including some of the highest-cost cities in the nation. The report calls for the IRS to require general contractor cost certifications for LIHTC projects, encourage allocating agencies and other stakeholders to collaborate on more standardized cost data and communicate to allocating agencies on how to collect information and review information on LIHTC syndication expenses. The GAO report recommended that Congress designate an agency to collect and maintain cost-related data from allocating agencies and periodically report on LIHTC development costs.

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