Can We Build Affordable Housing Without Relying On Tax Credits?
One of the most reliable vehicles in financing affordable housing today is the Low-Income Housing Tax Credit (LIHTC). Private investors receive a federal income tax credit when they make an equity investment in affordable rental housing as regulated by the state. While LIHTC is the primary tool in funding affordable housing, the process is lengthy and costly.
The goal of our Advancements Department is to conceive projects without relying on LIHTCs by significantly reducing costs. Some ways that they achieve this is by:
Securing land through a public jurisdiction, faith-based group or simply negotiating a ground lease
Building without a concrete podium (which accounts for 15% of all development costs) traditionally used for parking
Building alongside transit-oriented-communities (TOC), to avoid needing to build the concrete podium mentioned above
Utilizing quicker and more efficient construction methods (such as refurbishing existing structures, or using prefabricated materials)
Structuring the transaction to include higher rents that could support a bigger permanent loan. This has the extra added benefit of cross-subsidizing lower income rents that promote economic mobility while removing dependency on Section 8
Building a net-zero (operational) building (100% electric with solar panels and batteries). This removes the cost of installing gas lines from the street, in the building or gas meters - which frees up more cash-flow
Below are some of our upcoming and current projects spearheaded by our Advancements Department:
