HUD Observes Significant Decrease In Multifamily Deal Volume, Slowing Down Housing Production
The problem of affordable housing has taken a serious turn with the declining multifamily deals. Affordable Housing Summit discusses the challenges to affordable housing.
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Washington, DC- The supply of new affordable housing projects is declining. The developers, putting in their efforts on the affordable housing projects are struggling hard to crunch tight numbers as macroeconomic conditions increase difficulties for market-rate multifamily deals.
The slowdown in affordable housing deals can be attributed to the drop in new loan value at the nation’s top housing agency. HUD’s General deputy assistant secretary, Jeffrey Little said that HUD issued $6.3 Billion in Federal Housing Administration multifamily Loans.
From $32 Billion in FY 2021 to $24 Billion in FY 2022, there has been a sharp drop in affordable housing. Jeffrey’s Little at Affordable Housing Summit says, “ We’ve seen a massive drop in the volume of activity at HUD”.
The decline in deal volume at HUD indicates a decrease in new affordable housing projects at a time when housing affordability has become acute in the U.S. The U.S. faces a shortage of 7.3 Million rental homes for low-income renters according to the National Low Income Housing Coalition.
Affordable Housing Summit discussed the challenges that have led it to this slowdown and were the main topics of discussion. The panelists said it’s becoming clear that the industry standard for financing affordable housing projects, the low-income housing tax credit itself, is not making deals work anymore because of the complexity of the environment.
National Housing Trust, CEO, working on affordable programs to improve the financial conditions of low-income residents said that LIHTC does not take into consideration the forward-looking priorities. LIHTC has failed in creating enough housing opportunities. LIHTC along with other finance mechanisms are making the affordable housing capital complex.
Lori Chatman, CEO of enterprise community partners believes that the issue of affordable housing has become so grave that the government has no other choice left but to address it.
Last Updated: September 20, 2021