What is the difference between the LIHTC and income restricted apartments? (tenants, rental)

[tigergirl87]

This is my last question about affordable housing. I am hoping someone can provide information about the difference between the two. There is a property in my city that is income restricted, however it is a luxury type apartment. I have also noticed that the rents don't seem to be that much affordable than your every day market units. How does some of the units being income restricted really benefit low to middle income households when they are about the same as market units.

Thanks,

[Katie1]

Sounds like you are asking about Tax Credit. https://www.bing.com/search?q=tax+cr...433cb5e9e24db5

[Rabrrita]

There are dozens of different requirements by dozens of different entities that fall under the term use "income restricted".

We have some income restricted units. These set-asides were required as a condition of approving the reduction of market housing units through a conversion to luxury housing units. We essentially were asking to remove the lower income tenants, reduce the number of units by combining some into larger units, and raising rents to the top of the market. As a condition of allowing us proceed with the conversion project, they required that we set-aside 8% of the rental units as income restricted housing. However, the rents are still at asking rates just the amount a person pays is based on their income.

On paper, the rent is full value, just a loss is declared based on the difference from the asking rent to the reduce rent paid. Another advantage to maintaining full asking rental rates is the amount per month is just too high for any government voucher type program.

[oregonwoodsmoke]

Income restricted might not actually be for low income. The restriction might be something like the apartment is for people who don't earn any more than 10% over the median income for the area. If lots of folks have high income, the median income might be fairly generous. Each city is going to have their own regulations about it and it is very unlikely that restricted income housing is going to be for Section 8 and welfare tenants.

Also, income restricted apartments generally only have a few of the units that are income restricted. The rest of the units are at market rate.

[dkf747]

I have lived in two apartment communities where every apartment was income restricted. I had lived in a section 8 community years ago. They’re just regular apartments. Both required filling in lots of paperwork proving our income every year until COVID hit and haven’t had to do it if it was the same. I’’m not sure how they are different from the LIHTC (whatever that means?). Is that a tax credit for the landlords for providing units for lower income tenants?

[Rabrrita]

Originally Posted by oregonwoodsmoke

Income restricted might not actually be for low income.

And that is the underlying misunderstanding many have. They think that the term "income restricted" means low income or low rents. It just means that income limits have been placed on the applicant.