Freddie Mac released a white paper Dec. 10 that found LIHTC supports 40.1 percent of the multifamily housing market in rural Persistent Poverty Counties (PPCs) – a rate that is more than three times greater than the national average and one and a half times greater than all rural areas.
“LIHTC provides critical support for affordable housing in rural Persistent Poverty Counties across the country,” said Steve Guggenmos, vice president of Multifamily Research & Modeling at Freddie Mac. “Our research shows that these areas characterized by high rates of poverty rely on government programs, such as LIHTC, to make the creation and preservation of quality affordable housing economically viable.”
The paper also found:
- Income in rural PPCs is about 43 percent lower than the national average and 28 percent lower than the rural average. Over half of the renter population (51.8 percent) in rural PPCs is rent burdened compared with 45.8 percent in rural areas generally.
- Despite the abundance of LIHTC in the region, rental housing, particularly multifamily rental housing, is relatively uncommon. Only 32.6 percent of households in rural PPCs are renters, compared with 36.2 percent nationally.
- Single-family housing is the primary form of rental housing. Over 64 percent of all rentals are in properties with fewer than five units, which is substantially higher than the national rate of 52.1 percent.
- In rural PPCs, an average of 54 properties and 2,370 units have been supported by LIHTC annually since 2000. The rate has been in decline over the past decade, which is consistent with the national trend.
The white paper, titled “LIHTC in Rural Persistent Poverty Counties,” is part of Freddie Mac’s three-year Duty to Serve plan to increase rental and homeownership opportunities in historically underserved markets throughout the nation. This is the first of three papers the Multifamily line of business will release over the next two months.
