Affordable Housing Developers Face New Challenges

November 27, 2018                      By: Bendix Anderson

The decrease in the pricing of LIHTC credits, as well as rising construction costs may put a dent in affordable housing construction.

It’s getting harder for affordable housing developers to do new deals.

The affordable housing segment of the multifamily market is just getting used to the drop in the value of low-income housing tax credits (LIHTCs) caused by the tax reform law passed at the end of last year. Now rising interest rates and rising construction costs are making it even more difficult to build affordable housing properties.

“We are seeing the long-feared increase in interest rates,” says Patrick Sheridan, senior vice president of housing for affordable housing developer Volunteers of America. “The interest rate increases we are now experiencing are decreasing project feasibility, creating more demand for more soft debt sources.”.............Read More