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LIHTC Lessons from the Great Recession

Free Report


What Can the Last Recession Tell Us about the COVID-19 Recovery?

As America faces a likely post-pandemic recession, the Novogradac special report, "LIHTC Lessons from the Great Recession: Data Shows Occupancy Rates, Rental Income for Affordable Housing Properties Were Steady During Economic Downturn," looks at the last major economic downturn and its effect on low-income housing tax credit properties’ occupancy rates and rent received.

The free study is based on data from Novogradac’s proprietary database of surveys of affordable and market-rate rental properties, containing more than 100,000 individual properties.

60% Area Median Income Properties Showed Dip, then Growth

Different metropolitan statistical areas charted different paths to their recovery, but the overall trend in the last recession was a dip in occupancy in 2009 followed by persistent growth. Occupancy rates in these properties grew from 96.3% in 2008 to 98.4% in 2019.

Bigger Impact in Tourism Destinations

LIHTC properties in cities with an economic emphasis on tourism were affected more dramatically by the Great Recession. The report explores the impacts to two metropolitan statistical areas heavily dependent on tourism: Orlando-Kissimmee-Sanford and Las Vegas-Henderson-Paradise.

Rent Levels Steady

Even while the national median income flattened, the national median rent for two-bedroom apartments at 60% area median income increased in all but one year. As with occupancy, individual metropolitan statistical areas saw this rent change at different rates. The report charts the overall trend as well as discusses the few areas where rent decreases occurred.

Overall Outlook

The best news is this: a look back at the Great Recession shows that the effects on LIHTC properties were milder than they were for most parts of the economy and the impact didn’t last long. While there are certainly differences between the COVID economic downturn and the Great Recession, there is reason for optimism for LIHTC residents, developers and investors.

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Available for Free on the NovocoKnows App

This report is also available for free on the NovocoKnows app. Built for smartphones and tablets, the app can be downloaded from the Apple App Store, Google Play and the Amazon Appstore.

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