Biggest Winner in LIHTC is People

Published by Michael Novogradac on Friday, January 8, 2016 - 12:00am
Blog Low-Income Housing Tax Credit Showcase
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Veterans. Senior citizens. People with disabilities. Working families. People recovering from natural disasters.

Residents of homes financed by the low-income housing tax credit (LIHTC) come from all areas of life. There have been literally millions of LIHTC residents–an estimated 13.3 million people have lived in LIHTC housing over the 30 years since the program began in 1986–and those residents are a focus of the Novogradac Low-Income Housing Tax Credit Showcase, which was published Thursday.

The 160-page report, which covers aspects and benefits of America’s most important affordable housing production program, is a good reminder of who benefits from the LIHTC: People.

That’s more important now than ever, as an unprecedented 11 million renter households spend more than half their monthly income on rent. That’s more than one in four renters in the nation, and the lowest income renters are the most impacted–leaving them without enough resources for other basic needs, such as food, health care, transportation and education. The LIHTC is the most important resource to respond to these cost-burdened renters. According to a study by the U.S. Department of Housing and Urban Development (HUD), 45 percent of LIHTC residents earn less than 30 percent of the area median income (AMI). A report by Joint Center on Housing Studies at Harvard University reported that renter incomes have been largely flat while rents have steadily increased in recent years. At the same time, the nation lost 13 percent of its affordable housing stock since 2000.

Stories of LIHTC residents are spread throughout the Novogradac Low-Income Housing Tax Credit Showcase. The Showcase includes the tales of such residents as Army veteran Michael Carter of Battle Creek, Mich., 65-year-old Frances Sullivan of Boston, John Wedgeworth of Tuscaloosa, Ala., 26-year-old single mother Brittany Cole of Minneapolis, and William Piehl, a developmentally disabled adult who lives in Oakland, Calif.

What do they have in common? All live in LIHTC-financed homes.

Carter, who was unemployed and homeless for three years before moving into the Silver Star Apartments in Battle Creek, said having a LIHTC apartment allowed him to move on with the rest of his life–including finding employment. “When I finally got my apartment, it took a load off and I could concentrate on other things I needed to do to survive,” he said.

Living in LIHTC housing changed the life of Sullivan, a resident of the Charlesview Residences. Before she moved there, she lived nearby in an apartment she considered unsafe and rundown. “There’s no comparison. [Moving] helped me so much. There are great people who live here. It’s wonderful.”

And the LIHTC has also helped people recovering from all sorts of disasters, from Hurricane Katrina in New Orleans to

tornados in Joplin, Mo. and Tuscaloosa, Ala. John Wedgeworth lived in Rosedale Court apartments in Tuscaloosa for 13 years before a 2011 tornado damaged his home.  The LIHTC was used to finance its renovation.  “I was just so happy to come back home, because this is what I know,” Wedgeworth said after the renovation was completed and he moved back in. “This is home.”

“Most of the apartments here [in Minneapolis] cost more than I make [in a month],” said Cole, who lives with her 7-year-old son in the West Broadway Crescent apartments. “I never thought [an apartment] would be in my budget. But now I can pay the rent and be OK.”

With more than 2.7 million homes built by with LIHTC financing over the past 30 years, the beneficiaries of the tax credit live in all sorts of communities across the nation, in every congressional district of every state and territory. The Novogadac Low-Income Housing Tax Credit Showcase highlights 71 properties in 34 states and territories.

As Congress considers comprehensive tax reform, it’s important to note that the true beneficiaries of the LIHTC program aren’t investors, developers or even state and national officials tasked with providing affordable housing. The real winners of the LIHTC are people who have quality affordable housing that wouldn’t exist without the LIHTC.

Check out the Novogradac Low-Income Housing Tax Credit Showcase. You’ll see the statistics, the properties, the history and the numbers of the LIHTC. But woven throughout, you’ll read about the most important part: people.