icon Blueprint for July

An Influx of Funding for a ‘Bespoke’ Industry

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3 min read

The pandemic is far from over. New variants, one of which a health policy expert dubbed “COVID on steroids,” still threaten the world’s population. The United States has struggled to reach President Biden’s goal of having 70 percent of Americans with at least one shot by Independence Day. Sure, many people are going back to the office, joining crowds and baseball games and planning summer getaways. But COVID is still around and likely will be for the foreseeable future, and beyond.

The lasting impacts go far beyond our health. For more than a year, Americans have struggled to keep up with rent and mortgage payments or fallen behind. The Centers for Disease Control eviction moratorium staved off the financial crisis for millions of families that fell behind on their rent when they lost their jobs in the pandemic. But as that moratorium is due to come to an end, the Joint Center for Housing Studies of Harvard University warns in its State of the Nation’s Housing 2021 report released in mid-June that 6 million families are behind on rent. The moratorium bought some time, but the huge second wave of the eviction crisis is about to come crashing down just as the economy is trying to rebound.

Those who managed to keep their jobs during the pandemic are “snapping up homes for sale, pushing up prices further and excluding less affluent buyers from home ownership,” the Harvard study says. The result? A disproportionate number of at-risk households are low-income and people of color, according to the report. You can read the report in its entirety on the JCHS website.

So where does this put the affordable housing industry? Developers, lenders, syndicators, builders and everyone else involved in affordable housing are at a unique moment in time. Demand for affordable housing has never been higher, and likely will continue to increase at a rapid pace. There is much work to be done, and many homes to be built.

Yet, at the same time there are billions of dollars of investment set to pour into the industry. Biden’s American Rescue Plan, and the earlier COVID relief bills, have set aside vast amounts of money for affordable housing. Still more could be coming as part of the president’s ambitious infrastructure plan – though it remains to be seen if it can pass a bitterly divided Senate.

In this issue, we look to the states to see when and how this new funding will make its way into local affordable housing markets around the country. As the director of the Pennsylvania Housing Finance Agency notes, this is a “bespoke” industry where no two deals are exactly alike. That presents a challenge as states are figuring out how to deploy all these new resources and are stepping up to the plate to do so equitably and effectively. Many states will use it to help address the housing disparities JCHS cites in its report. Make no mistake, this investment is such that hasn’t been seen since the start of the Low Income Housing Tax Credit program decades ago.

Paul Connolly
Executive Editor

Tax Credit Advisor welcomes reader comments. Contact the executive editor at [email protected].