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Historic buildings may not be the first place that comes to mind when you think of affordable housing. However, if a structure is at least 50 years old, it may qualify for Historic Tax Credit (HTC) equity to support updates.

The firm’s HTC affordable housing preservation

$1.1B+

HTC equity committed by the firm to supporting affordable housing preservation

235

Buildings revitalized with the firm’s HTC equity

11,000+

Affordable housing units preserved with the firm’s HTC equity

 

SOURCE: Community Development Banking data from 2021 to 2024.

The HTC program is an option for financing affordable housing preservation projects. These projects can involve complex financing structures, multiple approvals and lots of time, so it’s important for developers and housing authorities alike to keep these five tips in mind.

1.  Start now.

In many cities, affordable housing is decades old and needs updating. Given the complexity of these projects, time is of the essence. Begin talking to historic preservation consultants and financial sources about your rehabilitation plans as soon as possible.

2. Build for the future.

Affordable housing should be built to last, regardless of ongoing funding. In addition to focusing on critical items like roofs, windows and HVAC systems, you should consider future advancements, such as:

  • Larger mail rooms for e-commerce deliveries
  • Laundry machines that accept credit cards and mobile payments
  • Wi-Fi access, especially in rural communities and areas with limited broadband access
  • Updated waste management services and systems, including underground models and mobile scheduling for pickup

3. Work with a bank that thinks outside the box.

Your banking team can do more than outline HTC certification; it can also help you determine the best financing options for your project. For example, if your project includes a daycare center, clinic or other community facility, it may qualify for New Markets Tax Credit equity. Likewise, you may be able to finance your project through Low-Income Housing Tax Credit, agency lending and bridge and permanent lending. Your banking team can connect you with tax advisors, consultants and other experts.

4. Balance HTC requirements with energy efficiency.

It’s possible to improve your energy efficiency while preserving historic elements. HTC financing frequently requires preserving buildings’ facades, windows, interior entryways and lobbies. As a result, you can’t add updates such as energy-efficient windows or exterior cladding that would change a building’s exterior. You can, however, make updates that don’t affect historic elements, such as upgrading interior building systems and installing LED light bulbs and energy-efficient appliances. These improvements may also qualify for energy tax credits.

5. Allow time to make accessibility updates.

Much of the existing public housing stock predates the Americans with Disabilities Act (ADA) of 1990, and properties may need renovations for ADA compliance. These renovations take precedence over HTC requirements. For example, if your project requires accessibility ramps or Braille signage, you must make these updates even if they alter the building’s historic character. Be sure to factor in time and money to make these necessary changes.

Public-private affordable housing efforts

HTC equity is just one example of public-private collaboration in accessible, affordable housing development. Others include: 

  • Housing assistance programs (HAPs): These programs provide financial aid to low-income families. HAPs can include rental subsidies, vouchers and other forms of support to ensure access to safe and affordable housing. 
  • Local revitalization initiatives: Many municipalities offer subsidies or tax benefits to developers that support local or regional initiatives to preserve historic properties and cultural landmarks. Research local revitalization initiatives to identify programs applicable to your project.

Watch a historic preservation in action. Check out the firm’s collaboration with the New York City Housing Authority to rehabilitate the Williamsburg Houses in Brooklyn.

JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.

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