LIHTC: Tax Credit Program for Low-Income Affordable Housing - Essay Sample

Introduction

LIHTC (Low-Income Housing Tax Credit) program implies the reliable source of funding that helps to create and preserve the affordable rental housing in the American today. According to the Tax Reform Act, this program gives for non-profit and profit Housing Developers with tax incentives which help in investing in the new construction or acquisition of rental housing for individuals with low-income (Baum-Snow & Marion, 2009). The LITHC program can be administered by the IRS (Internal Revenue Authority) and implemented by American Housing Finance Agencies. Hence the essay focuses on the summerset village senior, in St Augustine, Florida in connection to its affordability.

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The LIHTC benefits the public since, they reduce the crime, and raise the property value to the neighbourhood since rent savings to the low-income earner's households are the primary rationale for the program of LIHTC.

Summerset village senior was built in 2006 with an allocation of 615,268 dollars. The apartment is subsidized by the HFC (Housing Finance Corporation) in Florida, and it is comprised of 216 apartments. One bedroom totals 721 dollars while two bedrooms are $857. The rentals were built to target low-income earners individuals. They incorporate different population like family, elderly and individuals with a disability. The availability of wheelchairs implies that the apartment includes even disabled individuals. The rentals are subsidized to offer affordable housing services to low-income families and the elderly. The goal of LIHTC on the summerset village senior among the neighbourhood minimizes rent burden to low-income homestead through subsiding the cost that is needed to develop affordable housing. Various studies have shown that the community with low-income hosting LIHTC projects are associated with a reduction in property crime and violent, unlike higher income households.

The location of the rental determines its price. In the case with summerset village senior, it is situated along the summer breezeway for easy accessibility. In terms of peculiar features, the kitchen contains a dishwasher, disposal and refrigerator. The apartments also have high internet processing speed, air conditioning, heating, ceiling pans, smoke-free, and availability of wheelchair in the rooms. It has on-site management to provide security as well as living space. Besides, the summerset village senior contains a place for recreation and fitness like fitness centre, pool, and playground and volleyball court. There are many spaces available for playing and relaxation. The outdoor space includes a courtyard, grill, and picnic and barbecue area. It also provides services such as laundry facilities and on-site management. The apartment amenities has pet policy like the dogs allowed should weigh not more than 90 lbs, the restrictions on breed apply to 400 fee dollars, 45ib and two pet limit.

The Summerset Village senor aims to raise market share since it measures the revenue of the apartments based on the tax policy. Market share helps in evaluating the demand as compared to the competitors of other rentals. The current market share is estimated as 103 dollars for one bathroom more expensive, unlike 30 years old units in the market rate. While new rents are 12 dollars and 30year LIHTC units are almost $11. Therefore, the apartments provide affordable units since the households pay more than 50 per cent of their income are considered to have high rent burden.

The LIHTC program implementation began 30 years ago, where it is vital today as it provides a private-public partnership to preserve and create better affordable housing. Hence the federal government forgoes almost 9 billion dollars annually where it subsides the rental in Summerset village senior (Freedman & Owens, 2011). Therefore, low-income earners can acquire low-cost rental housing with proper services.

References

Baum-Snow, N. & Marion, J. (2009) .The effects of Low-Income Housing Tax Credit Developments on neighbourhoods: Journal of Public Economics, 93(5-6), pp. 654666. https://doi.org/10.1016/j.jpubeco.2009.01.001

Freedman, M. & Owens, E.G. (2011) Low-income housing development and crime. Journal of Urban Economics, 70 (2-3), pp. 115-131. https://doi.org/10.1016/j.jue.2011.04.001