Innovative Ideas for Revitalizing the LIHTC Market

摘要

The Low Income Housing Tax Credit (LIHTC) program is the federal governments primary tool for financing the development of affordable rental housing for low- and moderate-income households. Over the past 20 years, these tax credits emerged as the leading source of capital subsidy for the construction and rehabilitation of such housing. Using equity investments from publicprivate partnerships, the LIHTC program has created over 2 million housing units since its inception. Furthermore, until the recent economic downturn, the program peaked at financing and constructing approximately 100,000 rental units per year. The LIHTC program was established under the Tax Reform Act of 1986 to encourage the investment of private equity in the development of affordable rental housing. The program uses an indirect subsidy to promote private investment in the development of low-income rental housing by providing a dollar-for-dollar credit against tax liability. The subsidy makes it possible for both private and nonprofit developers to build high-quality housing with affordable rents.