Affordable Housing Developers Face New Challenges

September 19, 2017                     By: Bendix Anderson

The federal LIHTC program is providing less funding in 2017 than it did in prior years.

Affordable housing developers are facing more obstacles to building new projects, even though the need for affordable housing seems to grow stronger every year.

“We believe affordable housing production, that is, the development or preservation of projects financed with Low Income Housing Tax Credits (LIHTCs), will be at best flat to last year,” says Richard Gerwitz, co-head of Citi Community Capital, a community lending and investment arm of Citi.

The most important government program that helps fund new affordable housing—the federal LIHTC program—is providing less funding in 2017 than it did in prior years. At the same time, developers of all types have to pay more to compete for workers, construction materials and development sites. All that adds up to the likelihood that fewer units of affordable housing will start construction this year compared to 2016, even though the need for affordable housing may have never been greater, according to numerous studies and reports................Read More