The company then used a legal loophole that stripped the affordability protections from the apartments. The maneuver appears to have been lucrative for the company, which bought the property for under $20 million and flipped it two years later for $63 million. Today, advertised rents there have gone up by around 50%.
Similar stories have been playing out across the country for years, as developers and real estate investors take advantage of an obscure section of the tax code known as the “qualified contract” provision. It allows owners of low-income rental properties that have received generous tax credits to raise rents far sooner than the law typically requires.