Expiring Affordability of Low-Income Housing Tax Credit Properties: The Next Era in Preservation

W99-10: Affordability periods will end for the first 23,000 Low-Income Housing Tax Credit (LIHTC) units in 2002. Their expiration will launch a new round of preservation activity. The LIHTC portfolio now stands at approximately 750,000 units, increasing by 62,500 a year. By 2002, the portfolio will include almost one million units – comparable in size to the U.S. Department of Housing and Urban Development (HUD) affordable-housing portfolio now facing its own preservation challenges. Thanks to the preservation awareness prompted by concerns over HUD’s portfolio, Congress has promoted tax-credit preservation through a 15-year affordability extension passed in 1989, as have some states through a variety of allocation and financing tools. Yet for these efforts actually to result in preservation of affordable housing, a wide range of players – including state and federal legislators, state housing agencies, local housing administrators, investors and owners – still face the tasks of assessing the economics of preservation and implementing appropriate strategies…