We all know that the low-income housing tax credit (LIHTC) program is the biggest and most important source of financing for building and preserving affordable housing in the country. It’s the irreplaceable cornerstone of the financing package, but additional funding is almost always needed.
Here’s a nugget from our recent survey of affordable housing developers from across the country: About 46% of respondents cited state and local programs as their most important gap financing source last year. This includes regional trust funds, tax abatement programs, local bond measures, and city loans and subsidies.
Federal HOME funds was next, 22%, followed by the Federal Home Loan Bank’s Affordable Housing Program, 19%. A few developers also cited the National Housing Trust Fund and the Capital Magnet Fund, two more recent programs to hit the streets.
The industry has fiercely rallied around the LIHTC, but it’s also critical to protect the other housing programs. The White House released its fiscal 2020 spending plan, and once again it proposes to eliminate HOME and Community Development Block Grants, and significantly reduce funding for other programs.
Congress has rejected many of the prior cuts sought by the administration, but that doesn’t mean programs are safe. Stay vigilant. Even little cuts add up.
Other random thoughts:
- If it’s possible to declare a national emergency to build a border wall, can one be called to build affordable housing? I have a list of 50-some developers in this issue who can help.
- A stat I found interesting: Hannah, Austin, Alexis, Logan, and Taylor were the top five home buyer names with the fastest levels of sales growth in 2018, with all seeing 19% to 23% increases over the prior year, according to a Realtor.com analysis that finds the future of home buying skewing toward millennials, women, and Hispanics.