Senior LIHTC Properties are Less Costly to Operate than Family LIHTC Properties

Published by H. Blair Kincer on Friday, August 26, 2016 - 12:00am

Total operating expenses were lower for senior-focused low-income housing tax credit (LIHTC) properties than for family-focused properties in each of the five years Novogradac & Company examined as part of the newly-released 2016 Multifamily Rental Housing Operating Expense Report. Not only were expenses higher for family-focused properties, the difference grew from $148 per unit (3.7 percent) in 2010 to $365 per unit (8.4 percent) in 2014.   


Blog Graph Family-Focused LIHTC Properties
Click to enlarge


The growth was consistent, with one exception: from 2011 to 2012, per-unit operating expenses grew 6.8 percent for senior-focused properties, while family-focused LIHTC developments’ expenses increased by just 1.6 percent. This resulted in a year where per-unit expenses were just $53 (1.2 percent) higher for family properties.

The narrowing in 2012 and subsequent widening are more fully explained in the 2016 Multifamily Rental Housing Operating Expense Report, including discussions on which categorical expenses are most likely to determine the costs of maintaining LIHTC properties and how the geography of a development affects its operating expenses.