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NCSHA Study Shows ‘Parity’ for LIHTC, Market-Rate Developments
The National Council of State Housing Agencies (NCSHA) today released a national study of low-income housing tax credit (LIHTC) construction costs, “Variation in Development Costs for LIHTC Projects.” The survey analyzed a multiyear database of 160,000 homes in all 50 states and territories that used the LIHTC during 2011-2016. The study shows a general parity in LIHTC and market-rate development costs nationally and concludes that the primary factors that drive development costs are land, labor and materials, which are driven by market forces, not state agency administration. The report shows that there is a small minority of outlier costs among the developments, and the median development cost was $164,757, adjusted for inflation. The study was done by Abt Associates, and has a larger and more robust dataset compared to the forthcoming LIHTC development cost report expected to be released soon by the U.S. Government Accountability Office.