Low Income Housing
Market History and
Opportunity

Investment
Strategy

Critical
Housing Needs

LIHTC:
First Ten Years

Category B and C
Properties

Affordability
Sector of the
Housing Market

Consumer Trends

Political Trends

Target Market
Critical Requirements

Active Housing
Finance Agency
Environment

Critical Housing Need
Another focus of the affordable housing industry has been "critical housing need", which was defined in an April 2005 study by the Center for Housing Policy, as rent-overburden (generally defined as the payment of more than 30% of gross household income toward housing costs, but in this study defined as paying more than half of household income toward housing costs). According to this study, estimated 14.1 million, or 1 in 8, American households met this definition.

In the Southeast, which is the general region targeted by our initial business plan, 9.3% of working families fall within this definition. Nationally, of this "critical needs" group, 55.4% have incomes below 50% of area median income, and another 28.7% have incomes between 50% and 80% of the area median income.

As the LIHTC program progressed, it began to mesh with other programs (e.g., HOME, tax-exempt bonds, USDA, HOPE VI, state-level housing tax credits) that targeted specific income brackets, market pressures to provide housing for the nation’s burgeoning elderly population, and other

social desires such as community services, rural development, master-planned communities, mixed-income development, and replacement of dilapidated public housing units.

In 2003, the National Council of State Housing Agencies estimated that over 1.4 million affordable units have been constructed or preserved since the LIHTC program’s inception in 1986. Thus, with all the successes of the Housing Credit program, in reality it has only served about 11% of the aforementioned critical-needs households that fall within the "low-income" bracket.