In recent years we have seen an increase in tax credit appraisal requests in North Louisiana which is something we welcomed since our market expertise in this area extends statewide and most of our tax credit work was previously in the New Orleans MSA. Tax credit programs generally attract two different kinds of developers: those that focus on historic properties for conversion to short term rentals, luxury apartments, and/or high end commercial, and those who focus on low income housing renovation and refurbishment.
While there is some overlap, most developers are loyal to one or the other, either redeveloping properties that fall under the Low Income Housing Tax Credit (LIHTC) program or those that fall under the Historic Tax Credit program (HTC). LIHTC and HTC properties which involve existing buildings require economically unviable renovations that are only made possible by incentivizing developers. Both of these programs provide a public service in my opinion, as these properties would become blighted or otherwise fall further into disrepair.
The redevelopment of an existing apartment complex for Low Income Housing Tax Credit purposes is not as glamorous as renovating a ±125 year old, historic warehouse on a pending short term rental master lease and/or luxury redevelopment that qualify for Historic Tax Credits, but LIHTC ventures are of equal importance and they arguably contribute more to the local economy. The people of Louisiana never see the benefit of the master-leased short term rental redevelopments because they exist for tourists and the revenue goes directly out of state. Luxury redevelopments provide a similar benefit, or lack thereof, with regard to the local economy. There are exceptions, but not many, and the significant contribution of HTC on a local level does not go beyond historical preservation. I am not trying to minimize the importance of historical preservation, but rather highlight the importance of low income housing. LIHTC developments improve the lives of local residents in a very direct and tangible way.
Our subject was an ±90 unit multifamily facility that was 90% occupied at the time of inspection. The improvements were in fair to average condition, and the tenants seemed to tolerate the apartment complex as the amenities were sparse and often in similar condition as the primary improvements. The proposed improvements will add 20+ new units and offer better living conditions and amenities while remaining at affordable rent levels so as not to displace current tenants. This is the purpose of the LIHTC program and we were proud to be a part of this rehabilitation project.
Special thanks to Mosaic Property Valuations appraiser and Shreveport native Austin Johnson for his help on this project.
