Neighborhoods Face Housing Crunch as Tax Credits Expire

Advocates and elected officials are currently working on bills in both the House of Representatives and the Senate to increase the number of tax credits issued by the government by 50%. Buildings with expiring tax credits in gentrified neighborhoods face increased demand from wealthier households, leading to a more competitive housing market. Some owners, particularly nonprofits, have found ways to maintain affordable rents by securing new tax credits or local funds to support the operation of these buildings for longer durations. The construction of new affordable housing units is struggling to meet the rising demand due to challenges posed by increasing interest rates and inflation. The escalating construction costs make it difficult to build an adequate number of units with existing government subsidies. Financing housing projects was more affordable in the early stages of the tax-credit program, but it has become more challenging recently.