Study Shows Stronger Operating Performance of LIHTC Apartments
A study recently released by Reznick Group, a national CPA firm, shows that the operating performance of apartment properties financed with housing tax credits improved significantly during the years 2008-2010. These findings will be viewed as surprising in some quarters given the national recession, increased unemployment, and the turmoil in certain housing markets.
"Contrary to what many would have expected, Reznick Group's study concludes that housing tax credit properties actually performed better during this difficult economic period," said Fred Copeman, Reznick Group Principal and leader of the firm's Tax Credit Investment Services (TCIS) practice. The timing of the report coincides with increasing scrutiny of so-called corporate tax "loopholes" as well as Congressionally authorized expenditures such as the Low-Income Housing Tax Credit Program.
The study examined a variety of performance measures related to vacancy rates, debt coverage, and the incidence of underperforming properties, among others. Information was collected and analyzed on over 16,000 housing tax credit properties for calendar years 2008-2010. The data provide a basis for assessing a number of issues, including whether affordable housing has been over-built and whether housing tax credit properties are meeting their financial obligations.