The Low-Income Housing Tax Credit Program: A Performance Update Analysis
The low-income housing tax credit has enjoyed a universal improvement in property performance, confirmed a survey collecting data from thirty-two housing tax credit syndicators and three of the nation’s largest affordable housing investors, prepared by CohnReznick LLP.
Their report, “The Low-Income Housing Tax Credit Program: A Performance Update Analysis,” shows that the national inventory of housing credit properties continues to perform well across every type of project – large or small, urban, rural or exurban.
Among the report’s key findings:
- Physical Occupancy – Occupancy rates have increased across the country since 2009.
- Debt Coverage Ratio – Improved financial performance continues. The average housing credit projects in all 50 states and territories are operating above breakeven.
- Per-Unit net cash flow – Cash flow, while still modest in amount, has continued to improve; doubling over the last six years.
- 4% tax credit properties are performing as well as 9% credit properties.
- Properties set aside for senior tenants outperformed the overall portfolio by all measures in 2011 to 2012 (occupancy, DCR and per-unit cash flow).
- Only 18.6% of properties operated below 1.00 DCR in 2012; as recently as 2002 this figure was 35%.
- Larger properties (101-200 units/property) had the lowest incidence of underperformance.
- Financial performance was more heavily influenced by geographic location than any other factor.
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