More than 180,000 low-cost rental apartments are eligible to convert their properties to market rate by 2027|Axel Drainville|CC BY NC 2.0

Nearly 200,000 affordable housing units in California, Dallas, Chicago and Houston could see rents increase by more than 35% in the next five years as several agreements that assisted low-income renters are set to expire.

How does the affordable housing tax credit work?
The low-income housing tax credit (LIHTC) program encourages developers to build affordable properties. House owners who receive financing under the program “must keep the units rent restricted and available to low-income tenants” for “at least 30 years after project completion.”

Once the three-decade period ends, landlords can charge market rates for their units, making it impossible for lower-income groups to afford them. According to a report from Moody’s Analytics, more than 180,000 low-cost rental apartments are eligible to convert their properties to market rate by 2027.

On average, affordable housing rents are 38% below market rates, per a 2018 report from Freddie Mac.

What can be done?
Representatives of the House and Senate are working on bills to increase the number of tax credits issued by 50%. But the legislation has had little or no response in Congress.

Since 1987, more than 3.5 million apartment units have been financed under LIHTC.

Policy analysts project that 100,000 units of tax-credit housing will expire every year by 2033. 

Analysis of the U.S. census data by the National Low Income Housing Coalition advocacy group shows 400,000 affordable apartments and rental homes were lost between 2019 and 2021. 

Affordable housing is one of the major solutions to the increasing homelessness plaguing U.S. cities.