Low-income housing tax credit allocation in North Carolina: new construction versus historic adaptive reuse

The North Carolina Housing Finance Agency (NCHFA), the entity responsible for allocating the LIHTC in our state, is interested in learning whether or not adaptive reuse is economically more productive than new construction. This paper will examine the fiscal costs and community impacts of LIHTC-funded historic adaptive reuse and new construction projects since 2003. Twelve adaptive reuse projects and twelve comparable new construction projects have been compared and contrasted, considering estimated building and operating costs per unit and the proportion of NCHFA funds invested in each project. Public loan data reported under the Home Mortgage Disclosure Act (HMDA) provide an overview of the community context and impact of LIHTC developments within the census tracts surrounding each project. A site visit to Mebane Mill in Alamance County, the most recently financed LIHTC project, and three professional interviews with a developer, a builder, and a city council member, provide additional perspective on the development process for adaptive reuse.