More Tools for Affordable Housing May Prove Useful for Addressing Ohio’s Housing Gap
March 27, 2018
Over the past weekend there was plenty of news emanating from Washington D.C. Prior to the marches but before the interviews, Congress passed and the President signed the $1.3 trillion fiscal year (FY) 2018 omnibus spending bill (Spending Bill).
The Spending Bill Moves the Needle for Affordable Housing
The Spending Bill improves the outlook for affordable housing in the following ways:
- Increases the Low Income Housing Tax Credit (LIHTC) by twelve and a half percent (12.5%) for the next four years, making roughly $3.5 million additional LIHTCs potentially available in Ohio in 2018
- Expands the definition of “qualified low income housing project” to include an option for averaging tenant incomes, allowing developers to balance very low income (50% AMI or less) and extremely low income (30% AMI or less) units with higher income tenants
- Increases funding for and extends HUD’s Rental Assistance Demonstration program (RAD), bringing more voucher assistance to low income individuals and families
- Expands RAD eligibility to additional low income seniors
Lack of Affordable Housing for Extremely Low Income Households
These additional tools come on the heels of the latest report from the National Low Income Housing Coalition (NLIHC), which provided an alarming if not telling story of the ballooning housing gap. Major metropolitan cities like Columbus are experiencing booms in market-rate residential development, but on the flip-side, these same cities have a dearth of affordable housing, especially for extremely low income households.
Lowlights of the NLIHC:
- Of the 43.8 million renter households in the U.S., nearly a quarter 11.2 million are considered extremely low income households
- In Ohio, 58% of extremely low income households do not have access to affordable housing (rent that does not exceed 30% of income)
- Extremely low income households are more likely than others to be: a) seniors, b) disabled or c) to have children – all tenants that are more prone to interruptions in income and lack flexibility of expenses, leading to hardship
Improved economics for extremely low income units and more credits and funding availability, especially for seniors, have the potential to spur development of much needed units for this grossly underserved population.