In 2025, tenants of two low-income housing tax credit (LIHTC) properties in Springfield, Missouri—Rosewood Estates and Cedarwood Terrace—filed class action lawsuits against the properties’ past and current owners. These lawsuits claim violations of state and federal housing laws related to the owners’ attempts to exit the affordable housing program prematurely and force tenants from their homes. The case highlights growing tensions around affordable housing preservation, tenant rights, and landlord accountability at a critical moment in the nation’s housing crisis.
Background of the Lawsuits
Rosewood Estates and Cedarwood Terrace were developed nearly two decades ago under the LIHTC program, which offers tax credits to developers in exchange for providing affordable housing with restrictions on rent and tenant income levels. While the properties were originally bound by a 30-year compliance period to maintain affordable rental rates, owners can apply to opt out after 15 years through certain federal provisions.
The lawsuits allege that the former property owner, Zimmerman Properties, submitted opt-out applications to the Missouri Housing Development Commission (MHDC) in 2022 without properly notifying tenants as required. Tenants say they only learned of the owners’ plans years after the fact, after the properties were sold and notices began arriving that rent terms and tenancy conditions would be changing.
Tenant Allegations and Claims
- Failure to Provide Required Notifications: The class action claims that the owners violated lease provisions and tenant rights by not informing residents of opt-out requests and subsequent ownership changes in the legally mandated time frame.
- Illegal Early Evictions and Lease Violations: Tenants report receiving eviction notices and lease term changes before the expiration of the 15-year affordability period or proper decontrol intervals, violating protections under federal law.
- Attempted Rent Increases and Fee Hikes: Lease amendments introduced new administration fees and substantially increased penalties for returned checks, adding financial burden to low-income households.
- Displacement of Vulnerable Populations: Residents include seniors, people with disabilities, and working-class families who face the prospect of losing stable housing and community support networks.
Legal Context and Federal Housing Program
The LIHTC program allows developers to leave affordable housing commitments through a Qualified Contract process after 15 years, but it mandates extensive tenant protections, including advance notice and lease continuity. Federal regulations also require that owners cannot displace tenants unjustly or raise rents significantly before mandated timelines.
Plaintiffs argue that the owners and management companies violated both these federal requirements and Missouri’s tenant protection laws, aiming to enrich themselves by converting units into market-rate housing prematurely.
Developments and Current Litigation
The lawsuits, filed in Greene County Circuit Court in May 2025, list multiple defendants including Zimmerman Properties, Wilhoit Properties, Bryan Properties, as well as management firms and the MHDC. Plaintiffs seek injunctions blocking eviction and lease enforcement, demands for damages, and a court order to reinstate affordable housing status.
Additionally, a related lawsuit seeks compensation for former tenants who were displaced under alleged false pretenses and without adequate notice, claiming emotional distress, relocation costs, and housing instability.
Impact on Tenants and Community
Tenants emphasize the profound emotional and practical impacts of displacement, especially for those with disabilities or long-term community ties. The lawsuits underscore concerns about the erosion of affordable housing stock amid rising rents and gentrification pressures in Springfield and across the United States.
Tenant advocacy groups have rallied in support, urging local officials and housing authorities to enforce protections and ensure that affordability commitments are preserved.
Broader Housing Crisis and Policy Implications
These legal battles reflect a national trend where thousands of LIHTC properties face “opt-out” decisions in the coming years, risking the loss of tens of thousands of affordable units. Experts call for stronger federal oversight and tenant protections to offset market forces that threaten housing affordability.
Policy proposals include extending mandatory affordability periods, increasing tenant notification requirements, and incentivizing owners to maintain affordable housing.
Conclusion
The Springfield affordable housing complexes lawsuit serves as a crucial case study on the intersection of federal housing policies, tenant rights, and real estate development interests. As the plaintiffs seek to prevent premature displacement and preserve affordable homes, the litigation highlights the human stakes behind regulatory frameworks and market dynamics.
With affordable housing scarcity continuing to grow, the outcomes of these lawsuits will carry significant implications for tenants, developers, policymakers, and communities nationwide.
