Rental housing practitioners have asserted for years that Community Reinvestment Act (CRA) requirements affect demand for Low Income Housing Tax Credits. A new study from CohnReznick, an NHC Leadership Circle member, analyzes newly-collected data to document the strong relationship between CRA assessment areas and the prices financial institutions will pay for Housing Credits. This is by far the most comprehensive treatment of the subject to date, and it suggests that while CRA and the Housing Credit helpfully reinforce each other, by better aligning the two, government could leave less money on the table. Finding ways to spread investor demand that right now clusters in CRA assessment areas more evenly could help capital flow into underserved areas.
Read more in the CohnReznick study.