The Government Accountability Office (GAO) released a report on Housing Credit development costs based on analysis from Housing Credit properties across 12 allocating agencies in 10 states between 2011 and 2015. The report found wide variation in development costs, resulting from the variety of market conditions and other property and tenant characteristics of the housing included in GAO’s data set. The report also notes state agencies’ comprehensive and consistent efforts to ensure reasonable development costs in Housing Credit properties. GAO makes several recommendations to IRS and Congress that it believes would improve development cost assessment, focusing on cost certification practices, data collection and treatment of syndication fees. Enterprise appreciates GAO’s thorough analysis of the Housing Credit program and looks forward to working with Congress and the IRS to strengthen the program. We also urge Congress to enact the Affordable Housing Credit Improvement Act (S. 548/H.R. 1661), bipartisan legislation that would expand the Housing Credit, streamline program administration, and improve our ability to use this critical resource to preserve at-risk affordable housing and help vulnerable populations. Read more about the GAO report and Enterprise’s efforts to increase the supply of affordable housing in our blog post.
The GAO report’s findings are generally consistent with a recent independent analysis conducted by Abt Associates. Based on the Abt research and additional data from Dodge Data and Analytics, the National Council of State Housing Agencies (NCSHA) finds that Housing Credit apartments cost roughly the same to build as market rate apartments, despite the additional federal requirements that Housing Credit developments must meet. Read more about the Abt Associates report in Enterprise’s blog post, and see NCSHA’s side-by-side chart for a full comparison between the GAO report and the Abt study.