AN ANALYSIS OF THE ALLOCATION OF THE LOW-INCOME HOUSING TAX CREDIT (HOUSING SUBSIDIES).

摘要

The Tax Reform Act of 1986 eliminated the prior tax incentives for low-income housing development and replaced them with the Low-Income Housing Tax Credit (LIHTC). During the first nine years of its existence the LIHTC subsidized the development or rehabilitation of over 824,000 low-income units with a total cost to taxpayers of {dollar}28.7 billion in reduced federal tax revenues. When the LIHTC was first enacted in 1986 researchers warned that the tax credit as initially structured might not provide enough subsidy to encourage low-income housing development in all areas of the country. They further contended that subsidized housing development might be concentrated in those areas providing the highest returns to developers and that affordable housing development might not be located where it is most needed. Through subsequent legislation Congress took action to correct for these potential problems.; This study is the first examination of the issues regarding the allocation of the LIHTC since Congress made these amendments to the LIHTC. The data used in the study includes the LIHTC allocations to newly constructed low-income rental projects by ten states incorporating 752 MSAs and nonmetro counties for the period from 1990 through 1994. The database includes 622 newly constructed low-income rental projects with 46,373 units that were subsidized solely by the LIHTC.; The analysis of the allocation of the LIHTC to these properties resulted in the following conclusions: (1) The LIHTC does not provide enough subsidy by itself to encourage low-income rental housing development in all areas of the country even after the amendments made by subsequent legislation. (2) Newly constructed low-income housing units subsidized solely by the LIHTC are concentrated in those areas that provide the highest potential returns to developers. But this is not necessarily indicative of a poorly functioning program. And (3) the determination of whether the LIHTC is providing additional affordable rental units to those areas with the greatest need is dependent upon the variable selected to measure housing need.