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CohnReznick Housing Study Shows Consistent Upward Trend In Performance Of Properties With Low-Income Housing Tax Credit Investment


“The Low-Income Housing Tax Credit at Year 30: Recent Investment Performance (2013-2014)” Surveyed More Than 20,000 Properties Across the Country, Representing $83 Billion in Housing Credits

(New York, NY) –The Low-Income Housing Tax Credit (LIHTC) program, which reaches its 30th anniversary in 2016, has consistently delivered strong results for tax credit housing investors, according to a newly released study. The Low-Income Housing Tax Credit at Year 30: Recent Investment Performance (2013-2014), the fourth survey of properties benefitting from the housing credit, was once again commissioned by CohnReznick LLP, one of the nation’s top accounting, tax, and advisory firms, and is part of a long-term effort by CohnReznick to measure the performance of housing tax credit properties. The full report is now available here, and a free webinar discussing the key findings will take place on January 21, 2016, from 1:00 – 2:00 pm ET. Register here for The Low-Income Housing Tax Credit Program at Year 30: Recent Investment Performance.

“Overall, the risk level in LIHTC investments has fallen to historically-low levels,” said Fred Copeman, CohnReznick Principal and leader of the Firm’s Tax Credit Investment Services (TCIS) Practice.

According to the report, for the years surveyed, national median physical occupancy was 97.5% and median economic occupancy was 96.6%, proving that the demand for affordable housing units has lowered the turnover rate in housing credit properties, reduced the costs associated with units turning over, and lowered the loss in rental income associated with rent skips.

“Not only is there extraordinarily high occupancy in major cities, but the same has become true in suburban and rural areas. LIHTC housing is fully occupied, and working well,” added Copeman. “Meanwhile, the need for more affordable housing still exists in virtually every part of the country.” The report was released shortly after Congress authorized the permanent extension of the 9% fixed rate low-income housing tax credit.

Among the report’s key findings:

  • Physical occupancy improved from 97.0% in 2012 to 97.5% in 2014; DCR Debt Coverage Ratio (national median) improved from 1.30 to 1.33 over the same period.
  • The number of housing credit properties that are “underperforming,” either reporting physical occupancy below 90% or failing to achieve breakeven operations, is decreasing.  In 2005, roughly 35% of all housing credit properties were operating below breakeven; that percentage fell to 16.9% for calendar year 2014 and the deficits, where they existed were typically modest amounts.
  • Despite a modest increase in recent years, the foreclosure rate reported by housing tax credit properties continues to compare very favorably with every other real estate asset class.


Data for more than 20,000 properties was contributed by 39 organizations, including active housing syndicators and a number of the nation’s largest housing investors and affordable housing organizations.

About the Tax Credit Investment Services Group
The Tax Credit Investment Services (TCIS) group is a dedicated business unit within CohnReznick focused on evaluating and advising clients on tax-advantaged investments, low-income housing, historic rehabilitation, new markets and renewable energy projects. As a group made up of experts with a fairly narrow industry focus, TCIS covers a variety of consulting areas, including investment due diligence, investment and business strategy, and industry benchmarking research for the benefit of investor and syndicator communities.

The TCIS team is composed of a multidisciplinary group of professionals, including CPAs, attorneys, financial analysts and other professionals with experience as state housing finance agency and commercial real estate executives. CohnReznick’s TCIS team members have authored a number of affordable housing industry studies, speak regularly at industry conferences and have been widely quoted in the financial press concerning tax credit investments.

In addition to the professional experience of TCIS team members, the group’s clients benefit from the knowledge and experience of hundreds of CohnReznick audit, tax and consulting professionals working on investment tax credit transactions on a daily basis.

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