In real estate there’s a tension between two categories of homes: Market-Rate and Affordable Housing. It’s almost another way to say The-Haves and The-Have-Nots…or more accurately the Haves and the Hardly-Haves.
Yoda’s job was the train the one that would save the world from a great imbalance. The federal government here acts as Yoda, training or giving money, to the States in order to prevent great imbalance in the housed versus the homeless. Money from the feds pours into the state at $1.75 per resident and many states have a handler for this money and deals with the applications from the builder. Michigan’s handler is Michigan State Housing Development Authority (MSHDA). Out of every 4 application 1 is awarded the credit towards their property taxes, which generally is about 9% of their project cost IF somewhere around 40% of the apartments in the project will be rent-restricted for 18 years.
Low-Income Housing Tax Credit for the High-Rise Builder
Some businesses have choosen Grand Rapids as their land for the plentiful, and just enough. In 2015 there were 5 different LLCs, individuals or corporations who applied for this money for building projects in Grand Rapids. The 20 East Fulton project, a mixed-use high-rise development, proposed by Midland-based Brookstone Capital, LLC was another benefactor in the past.
The LIHTC does nothing directly towards making buying a home more affordable for a lower-income-bracket family or individual. The tax credit is for the builder. Directly it creates an incentive for builders (with extra time and knowledge of the application process) to create space for people or a restricted (disability, retired) or low-income (qualifies for public assistance). Without something like LIHTC there would be no force creating low-income housing, even though individuals with low-income have population growth just like upper-income or middle-income does.
The LIHTC keeps the light sabers at a stand-still. The rich do not push the poor totally away, and the poor do not kill the rich. They live together in one apartment complex. If you live with someone who pays way less rent than you do for the same apartment, the LIHTC might be why. If you pay less than your neighbor does, don’t tell them.
If you still need housing click here...may the force be with you.