Interactive Tool Shows the Challenges in Affordable Housing Development

The Urban Institute and National Housing Conference have published an interactive and educative tool, “The Cost of Affordable Housing: Does It Pencil Out,” that demonstrates the huge gap between what it costs to build and maintain affordable housing and the affordable rent that low-income families can pay, making it difficult to finance affordable housing without additional subsidy. Aimed at policymakers and those new to the affordable housing world, users can play with the tool by changing specific variables on development costs and see how a development’s funding gap can be closed. The tool spotlights the importance of federal programs that support affordable housing, such as the Low-Income Housing Tax Credit (LIHTC) – which is the largest source of capital supporting the affordable housing inventory in the United States.

The formidable gap in financing affordable housing development is why it is important for the public to call on Congress to pass Sen. Maria Cantwell’s (D-Wash.) and Sen. Orrin Hatch’s (R-Utah) Affordable Housing Improvement Act of 2016. This legislation would expand the overall LIHTC allocation authority by 50 percent and make permanent the 4 percent Housing Credit rate. For more information on this legislation, visit NAHRO’s Community Development Resource Center (log-in required) to access a one-pager on the bills.

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