Affordable multifamily housing is no longer defined by the urban public housing projects of the 1960’s. It has evolved into contemporary workforce housing that serves the needs of local communities. If developed or recapitalized properly, affordable projects are indistinguishable from conventional market-rate properties.
The successful evolution can, in part, be credited to the Low Income Housing Tax Credit (LIHTC) program, an indirect federal subsidy used to finance affordable housing. The LIHTC gives investors a dollar-for-dollar reduction in their federal tax liability in exchange for providing equity financing.
In return for the allocation of tax credits, Reiner Communities covenants to maintain rents below market rates, typically serving households earning 50% to 60% of the area’s median income. Reiner Communities then sells the tax credits to large corporate investors and uses the capital to subsidize the cost of units rented at below-market rates.
Another very important financing tool that Reiner Communities utilizes is tax-exempt housing bonds. The bonds, also purchased by large investors, are exempt from income taxes which allows a lower yield on the bonds and results in below market interest rates for the long term debt financing.
Reiner Communities' efficient use of these and other housing programs contributes to the production of quality affordable housing.