The Long Arc of Affordability: Understanding Outcomes for Expiring LIHTC Properties and Pathways to Preservation

<span class="TextRun SCXW31866521 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXW31866521 BCX0">This paper analyzes what happens to Low Income Housing Tax Credit-funded properties in North Carolina after their affordability restrictions expire, and explores options for physically and financially preserving these properties in increasingly hot real estate markets. To understand the full spectrum of hypothetical outcomes for expiring LIHTC properties, this paper will first analyze the political economic context that enabled the tax credit program to take root as the United States&rsquo; primary mechanism of creating new government subsidized housing from national, municipal, and tenant-level perspectives. Next, the paper connects this context to the rapidly changing North Carolina case study by evaluating outcomes for expired LIHTC properties through the lens of hot and cold rental housing markets throughout the state. Ultimately, I find that few observable changes in rent, vacancy, and ownership have occurred since the first round of LIHTC properties began expiring in 2023, regardless of market temperature. In fact, rents for expired properties have generally increased at a slower pace than both non-expired LIHTC and market rate properties. These findings could be the result of the age and desirability of expired buildings, the small sample size since few buildings with available data have yet aged out, or could be indicative of an emergent pool of naturally occurring affordable housing. Finally, the paper will discuss what it means to preserve affordable housing, and explore potential tools to accomplish these preservation goals.</span></span><span class="EOP SCXW31866521 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:0,&quot;335551620&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:276}">&nbsp;</span>