Monday, July 9, 2018

In 10 Years from 2007-2016 New Construction LIHTC Units Were 23% of All New Unfurnished Rental Apartments Completed, But Dropped to 9% By 2016.

I recently spent some time looking at the Multifamily Survey of Market Completion (SOMA) reports from the Census/HUD to better understand how many NEW apartments (5+ units) were coming on line ("completions") . [This survey data is available at national level, with no state level breakouts and only some metro breakouts].  

Buried in recent versions of those SOMA reports there is also an annual estimate of LIHTC apartment completions. I believe LIHTC survey data in the SOMA reports are substantially understated after I compared the survey data to LIHTC placed in service data directly reported to HUD from state housing agencies.

I compared the total (privately owned) unfurnished apartment completions from the SOMA reports (Table 9) to the more accurate LIHTC placed in service data unit counts from the HUD LIHTC database, focusing ONLY on units in LIHTC NEW construction projects (no acquisitions or rehabs). 

The table and two graphs in the PDF HERE, and embedded below, show the results of that analysis. 

Several observations:

  1. In 2007 there were 70,332 units in new construction LIHTC projects placed in service. 
  2. By 2016 units in new construction LIHTC projects placed in service dropped to 26,154 units, a 63% decline. 
  3. From 2007-2016 (privately owned) unfurnished rental completions increased from 104,800 (2007) to 262,500 (2016), a 150% increase 
  4. Adding the two together there were a TOTAL of 175,132 unfurnished rental apartment units completed in 2007, increasing to 288,654 completed unfinished rental apartment units in 2016 (an increase of 65%).
  5. In 2007 units in new construction LIHTC projects placed in service were 40 % of ALL unfurnished apartment rental units completed.  By 2016 that percentage had dropped to 9%; but based on production in the earlier years the 10 year average percentage was still 23%. (Placed in service data for LIHTC projects in 2017 is not yet available. If the total LIHTC units go up the % may or may not go up depending on the change in total units completed). 
  6. 2,016,399 total unfinished apartment rental units were completed in the 10 years from 2007-2016 including 464,999 new construction units in LIHTC projects that were placed in service. 
  7. Fun fact: The 464,999 units in LIHTC new construction projects placed in service from 2007-2016 was 20% higher than the 387,100 reported new construction condo completions in the SOMA reports over those same 10 years.

Originally created and posted on the Oregon Housing Blog

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