When real estate markets crash, low-income-housing developers often can escape relatively unscathed. After all, unlike luxury condos, there is always a demand for apartments that target low-income households, so downturns tend to bring shovels to a halt on the market-rate projects far faster than on the subsidized ones.
But the ever-deepening economic crisis has proven anything but typical, and developers of low-income housing are being sucked into the vortex, feeling the same paralysis affecting the rest of the real estate world. Now, on top of the lending crisis affecting all construction, a plunge in public funding awaits, as the cash-poor city and state governments are proposing to slash hundreds of millions of dollars in housing subsidies. read more »