In recent months, housing advocates have been raising alarms about a trend which can put affordable housing organizations at risk. Nationwide, several housing organizations have learned that limited partners that are originally involved in the development of a project are subsequently purchased by entities dubbed “aggregators.” These aggregators then challenge nonprofit transfer rights under the low-income housing tax credit (LIHTC) by “pressuring them to abandon their transfer rights, pay a substantial buyout, agree to a forced sale, or otherwise provide financial benefit to the aggregator—all at the expense of low-income housing,”according to an article published by LeadingAge in September.
In response to this, David Davenport of Winthrop & Weinstine, who litigated one of the aggregator cases, has developed a list of characteristics of aggregators that may tip off housing operators to their risk. LeadingAge Ohio strongly encourages housing members to review the list and pay careful attention to any ownership transfers of their partners. Questions may be directed to Linda Couch at lcouch@leadingage.org.