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The Preservation of Subsidized Housing

02/22/19
Dr.  Vincent Reina

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The federal government has made a direct investment in increasing the supply of affordable housing through programs subsidizing the development of more than 6 million units of rental housing nationwide. And while countless reports have highlighted the lack of affordable rental housing throughout the United States, less is known about the future of existing subsidized affordable rental housing stock. A working paper authored by Dr. Vincent Reina for Grounded Solutions Network focuses on what we know about the scope and magnitude of subsidized housing units at risk of losing affordability – primarily due to expiring affordability restrictions, depreciation of properties, and reduced funding for almost all national housing programs. Specifically, findings indicate that over the next 10 years:

  • Over 455,000 units, or almost 1/4 of the existing units in the LIHTC program, will reach the end of their affordability restriction periods;
  • Almost 590,000 units in Section 8 project-based rental assistance (PBRA) programs, representing well over half of the existing units, will be in properties where the owner has the option to renew their subsidy or exit the program; and
  • Almost 43,000 of the 360,000 units ever developed in the Section 202 program, and 11,000 of the 400,000 units ever developed in the Section 515 program, will reach the end of their subsidy period.

Further highlighting what remains unknown about the preservation of subsidized housing, many of the same units where subsidy terms are not expiring will need recapitalization. Specifically:

  • There is at least $26 billion in deferred maintenance on the 1 million public housing units in the country.
  • 1.1 million LIHTC units are approaching the year 15 mark, and many will need recapitalization.

The study was published by the Lincoln Institute of Land Policy and available for review and download here.

 

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