Novogradac Estimate: Income Limits Anticipated to Increase by 3.11% on Average in 2023 Using Five-Year ACS Data
According to an estimate by Novogradac, income limits for the low-income housing tax credit (LIHTC) program, properties financed by tax-exempt bonds and properties in many U.S. Department of Housing and Urban Development (HUD) programs are currently anticipated to increase 3.11% on average in 2023 if the HUD uses five-year American Community Survey (ACS) data. While the 3.11% increase would be a dramatic drop from the 10.5% average increase in 2022, it is still higher than anticipated, largely influenced by inflation and caps on increases in 2022. Novogradac estimates that 44% of areas will have an income limit increase of greater than 4% and 25% of areas would be subject to the 5% cap. HUD has not announced what data it will use to calculate 2023 income limits, but it has historically defaulted to the five-year ACS data when the one-year ACS data is not available. The Census Bureau did not release 2020 one-year ACS data due to difficulties in compiling it because of the COVID-19 pandemic.
The data is available to purchase on an area by area basis through the Novogradac Rent and Income Limits Estimator©, which enables developers, investors and lenders to better underwrite LIHTC properties.