As the country continues to grapple with the ongoing affordability crisis, a new report reveals that the issue got even worse over the last three years. A new analysis from Moody’s Analytics found that the nation lost 8 percent of the total stock of affordable housing units for extremely low-income renters, a figure that equals more than 500,000 units. The loss was fueled by a combination of factors, including affordable units being converted to market-rate. “Any reduction in this type of housing will worsen the existing shortage and exacerbate the hardships faced by low-income renters,” said the report’s authors. Every year, thousands of affordable housing units are considered at risk of disappearing from the market. The Low-Income Housing Tax Credit (LIHTC) program is a big reason why. In most states, properties in the program must commit to remaining affordable for 30 years. Once that period expires, owners have multiple options for what to do next, and converting to market-rate is one of them. Over the next five years, 188,000 LIHTC units are set to expire.
After it was made permanent in the early 1990s, millions of affordable housing units have been built or preserved under the LIHTC program. But as the compliance periods expire and steps toward preserving affordable units are not taken, it could seriously worsen the affordable housing crisis, as the report makes clear. There’s been a lot of pressure on lawmakers to take action on the crisis, and the Biden administration has recently addressed the issue in its 2024 Fiscal Year budget request. In its proposal, the administration set aside $111 billion for housing and development-related tax proposals. Of that, $385 million is for Tenant Protection Vouchers, a significant increase from last year’s budget. The proposed funds are good news for the affordable housing industry, but preserving existing units is also crucially important, and will help keep people in their homes, at least for the time being.
