June 23, 2010

Affordable housing built with help from the use of federal low-income housing tax credits has a positive impact on distressed neighborhoods in the city and is crucial to economic development, according to a new study scheduled for release Wednesday.

The study found that the use of federal low-income housing tax credits is crucial to building and rehabilitating affordable housing, and to helping inner city neighborhoods. By paying affordable rent—monthly rents averaging $500—families were able to more than double their discretionary income, which in turn allowed them to pay for health care, reduce their debt or put money into savings.

Businesses near the developments also benefit from affordable housing, because residents have more money to spend after paying their rent. Additionally, the study found that such developments increase adjacent property values and help generate property tax revenue to the city.

The study was based on an analysis of two affordable housing developments in the Belmont area of the Bronx that were built by using tax credits—Tri-Bel project, a 10-building development with 134 units, and Creston, a three-building development with 80 units. The Furman Center for Real Estate and Urban Policy at New York University and independent consultants analyzed the data. The study was commissioned by two local developers of affordable housing, Local Initiatives Support Corp. and Enterprise Community Partners.

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Source: Crain's New York Business