Looming LIHTC roll-off dates could compound regional affordable housing challenges

The Kansas City region is set to lose more than 10,000 affordable housing units in the next decade. These units are in buildings with expiring agreements in the Low-Income Housing Tax Credit (LIHTC) program. LIHTC is a federal incentive program intended to spur the development of affordable housing in which many units rent to households making 60% of the area median income ($46,800 for a family of three in 2021) or less. As part of these agreements, owners of LIHTC properties cannot charge more than 30% of the annual median income tied to that unit.  

A significant number of these developments in the region were built during the 1990s and early 2000s. In most cases, developers agree to follow affordability guidelines for 30 years. Over the next decade, as property owners move out of affordability periods, they may move to market-rate rents or find ways to maintain more affordable rents. As discussed in a previous data story, certain geographies and types of properties are less likely to maintain affordability after their LIHTC agreement ends, such as those owned by for-profit entities or those using only a LIHTC program.  

Currently the region has just over 20,000 units that are part of the program and 87% of these agreements will expire in the next 15 years. If participating property owners exit the program, the loss of units will be unevenly distributed throughout the region. In some of the region’s counties, LIHTC accounts for a significant number of affordable units for low-income residents. 

Every county in the MARC region could lose 38% or more of their LIHTC units within a decade. Jackson County, the region’s most populous county, could lose 6,356 units in that time. In Johnson County, nearly 60% or 1,258 units are scheduled to exit the program. Platte County could experience the region’s most significant percentage loss with nearly 85% of LIHTC units slated to roll off over the next 10 years. In the same time frame, Wyandotte and Clay counties could each lose nearly 900 units of affordable housing if current LIHTC agreements expire on their eligible roll-off dates. Overall, the region is on track to lose over half of its current LIHTC stock or more than 10,000 units by 2031. That percentage increases to 87% when looking at potential roll-offs over 15 years. 

If these roll-offs occur, it will increase the affordability challenges faced by residents across the region. Currently, there is a gap of 64,000 units of affordable housing in the region. This means there are more residents with lower incomes than there are units available at prices they can afford. Any loss of affordable units will grow this gap. As the region continues to explore solutions to increase affordable housing, the preservation of units we have is also important. Visit our previous data story to learn more about the risk of LIHTC units rolling off affordability requirements and the next steps the region can begin to take in discussions around preservation.