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More than Half of LIHTC Households Earn 30% AMI or Below Per New HUD LIHTC Tenant Data

Published by Peter Lawrence on Wednesday, August 30, 2023 - 12:00AM

The August 2023 release of low-income housing tax credit (LIHTC) tenant data from the U.S. Department of Housing and Urban Development (HUD) further proves that the incentive continues to assist the most vulnerable renter households.

The 2021 LIHTC Tenant Level Data release shows that 52.2% of renter households residing in LIHTC homes earned at or below 30% of the area median income (AMI). This data goes a long way in disproving oft-repeated mischaracterizations of the LIHTC as primarily serving the higher end of low-income households to the detriment of those with extremely low incomes. The 2021 data captures tenant details during the height of the pandemic and that data shows that more lower-income households were being served by the LIHTC than the amount reported in the pre-pandemic data release. This suggests the incentive provided much needed assistance at a time when vulnerable households were facing unprecedented stresses.

About HUD’s LIHTC Tenant Data

Under the Housing Economic and Recovery Act (HERA) of 2008, state agencies are required to submit demographic and economic data on LIHTC tenants to HUD. Starting in 2021, HUD released a documentation guide and data tables, rather than a full report as released in prior years. The recent tenant data release covers data on residents of LIHTC properties placed in service through Dec. 31, 2021. In May to August of each year, HUD updates the LIHTC placed in service database and then a survey on LIHTC tenant demographics is sent to the state LIHTC allocating agencies. Tenant data is collected, and the report is then published the following year. Data was provided for the more than 2.4 million LIHTC homes included in the HERA-mandated 2021 tenant data, 27,971 more homes than in 2020. 

LIHTC Continues to Serve Low-Income Households

HUD’s LIHTC tenant data indicates that the LIHTC incentive is a powerful tool in providing homes to very low- and extremely low-income renter households. In 2021,

  • 15.6% of LIHTC residents earned between 30% to 40% of AMI (slightly less than the 17.0% reported in 2019),
  • 13.5% earned between 40% to 50% of AMI (compared to 13.8% in 2019),
  • 8.8% earned between 50% to 60% of AMI (compared to 9.0% in 2019), and
  • 10.0% earned 60% of AMI or more (compared to 7.6% in 2019).

In 2021, nearly 67.8% of households earned 40% of AMI or less, proof that the LIHTC continues to provide housing to the population it was created to serve. The graphic below provides a breakdown of LIHTC residents by income.

Blog Graphic: LIHTC Continues to Deeply Target Extremely Low-Income Individuals and Families

Click to Enlarge


Race and Ethnicity Trends of LIHTC Residents Remain Largely the Same

The 2021 release shows nearly one-third of respondents did not report race data, compared to nearly one-quarter in 2019. The Documentation Guide released with the 2021 data notes that tenants are not required to provide a response regarding their race and ethnicity. Further, data like race and ethnicity, which are reported on the tenant level, suffer from underreporting of properties, units and household members. The share of white tenants has been decreasing based on the last several reports–in 2021, 24.4% of LIHTC tenants were white, down from 2018’s 38.4%. There was a decrease in the share of Black tenants of 3.4 percentage points; all other racial categories saw a small decrease of less than 1  percentage point between 2019 and 2021. Even with the decreases seen, the Black and white populations continue to make up the majority of LIHTC residents. See the graphic below for a full breakdown of LIHTC residents in 2021 by race. 

Blog Graphic: Race and Ethnicity

Click to Enlarge


Rental Assistance

Many of the tenants residing in LIHTC homes receive federal, state or local rental assistance. While these tenants benefit from the reduced rents charged in LIHTC properties, the rental assistance they receive helps make LIHTC housing even more affordable to the lowest income households. In 2021, the most common federal rental assistance received by LIHTC tenants was HUD Project-Based Rental Assistance at 22.4%, followed by HUD Housing Choice Vouchers at 18.2% of LIHTC residents. Overall, 40.2% of LIHTC residents were receiving some form of rental assistance in 2021, which is the same as 2019 and virtually unchanged from the reported 40.9% in 2018. While it is true that 40% of LIHTC households are receiving rental assistance to be more able to afford their LIHTC homes, more LIHTC homes are financed each year that are affordable to extremely low-income households even without rental assistance. As HUD’s guide notes, if rental assistance data are not reported, it is most likely because those residents are not receiving rental assistance. The percentage of LIHTC residents not receiving rental assistance was 38.5% in 2019 and 2021, compared to 37.1% of residents who did not receive rental assistance in 2018. In 2021, 21.4% of the data were unavailable, which was unchanged from 2019. It should be noted, 70.2% of properties reported data on rental assistance in 2021 compared to 89.2% in 2019. See the graphic below that illustrates the changes of rental assistance received over time.

Blog Graphic: Rental Assistance Received from 2015 to 2021

Click to Enlarge


Disability Status

The number of LIHTC residents reported with disabilities decreased from 2019 to 2021. In 2021, 70.2% of LIHTC households provided disability information and 11.6% of households had at least one member reported as disabled. The reporting percentage is lower than the number reported for 2019, when 89.2% of households reported disability information and 12.4% had at least one member reported as disabled. Just as with the race and ethnicity data, these numbers likely understate reality, as tenants are not required to respond to the question on disability status. The following table compares the disability status numbers throughout the years.

Blog Graphic: Disability

Clcik to Enlarge


Impact of the LIHTC Incentive

Amid the economic hardships caused by the COVID-19 pandemic, the 2021 HUD LIHTC tenant data shows that during the worst of times, the LIHTC was serving the neediest households. The data will be useful to both policymakers and the affordable housing community in their efforts to counter the misperception that the LIHTC only serves households earning between 50% and 60% AMI. HUD’s LIHTC tenant data shows that the LIHTC serves the most vulnerable households and is a valuable tool often used together with rental assistance.

The severity of the nation’s affordable housing crisis requires that existing tools be expanded–in the case of the LIHTC, this means passage of the Affordable Housing Credit Improvement Act (AHCIA), which was reintroduced in May and includes a basis boost for extremely low-income households. The AHCIA will ensure the LIHTC continues to provide affordable rental housing for low-income households and will strengthen the LIHTC to serve even more of the lowest income households among hard-to-reach populations and communities.

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