In the Department of Housing and Urban Development’s fiscal 2012 budget proposal, officials have proposed a major change to the low-income housing tax credit program’s occupancy threshold requirement. Instead of the current cap of households earning no more than 60 percent of the area median income (AMI), HUD officials are looking at an “income-averaging” option that allows properties to serve households whose average income is no greater than 60 percent of the AMI and with no individual household above 80 percent.
Almost three-quarters—72%—of Housing Finance Online survey respondents agreed that expanding the AMI to serve households up to 80% would be beneficial.
One respondent noted, “In high-cost areas of the country, the flexibility of allowing for higher-income individuals will allow for the flexibility of the program in general. It will be beneficial to provide for a larger mix of income households, which could potentially be seen as a more stable affordable housing program. Even in high-cost areas, 80% AMI is still an unaffordable rent.”
However, 20% of respondents said the program should continue to only target those households earning no more than 60% of the AMI. “If anything, the income-targeting should go lower, not higher. The ‘low-income’ housing tax credit should assist those most in need of housing, with the credits going to developers who can meet that great need,” noted another respondent.
The remaining 8% of respondents were still undecided on the topic.