Happy Anniversary, Housing Credit!
By Garth Rieman
This month marks the 27th anniversary of the federal Low Income Housing Tax Credit (LIHTC) program. Throughout the program’s tenure, what lessons have we learned? What key components continue to make it a successful program?
View the full forum here.
This month marks the 27th anniversary of the Tax Reform Act of 1986, the legislation that created the Low Income Housing Tax Credit (Housing Credit). Though no one could predict its future at the time, the Housing Credit has become the most successful rental housing program in history, with over 2.6 million units of affordable, quality apartments constructed and preserved in rural, suburban and urban areas across the country.
The Housing Credit helps finance approximately 100,000 affordable apartments each year, with almost half of them the result of Housing Credit awarded in conjunction with tax-exempt private activity Housing Bonds. The Housing Credit revitalizes communities, spurs private sector investment, provides much needed affordable rental housing, and adds approximately $6.8 billion in income and 95,000 full-time jobs per year across all U.S. industries.
What we’ve learned over 27 years is that the Housing Credit’s success lies in many of the elements Congress built into the program and have strengthened through legislation since. These key elements include:
- State administration, which gives states the ability to direct the Housing Credit to the areas, types of housing, and people that need it most.
- Private sector oversight, baked into the program through a strong state-federal compliance monitoring partnership and robust recapture rules.
- Performance-based incentives, including reallocating unused Credits from states that cannot use them in a given year to states that can.
To mark this 27-year milestone, please thank your members of Congress for their past support of this vital resource and secure their ongoing support to ensure the next 27 years of success.
As Congress considers comprehensive tax reform, the Housing Credit and Housing Bond programs face the threat of elimination or curtailment. All affordable housing advocates should take every opportunity they can to communicate to their members of Congress the importance of these programs.
We must enlist our supporters’ active efforts to communicate their support to their leadership and the committee leaders with jurisdiction over these programs.
We must also continue to educate members, particularly those who sit on the committees of jurisdiction, on what we are accomplishing with the Housing Credit, Bonds, and the other federal programs that work with them. One excellent way to do this is by getting members out to see the affordable housing these programs have made possible in their states or districts and by putting a human face on their accomplishments by telling members the stories of residents and other beneficiaries of the affordable housing they have produced. Please visit NCSHA’s Faces of Home to see the families across America whose lives have been enriched by the Housing Credit. If you have a Faces of Home story to share, please contact NCSHA’s Justin Bras.
Happy birthday, Housing Credit, and many more!
Garth Rieman is the Director of Housing Advocacy and Strategic Initiatives for National Council of State Housing Agencies
Welcome to the BPC Housing Commission expert forum! This forum is intended to foster interactive and substantive discussion about pressing housing issues. Each month contributors from different parts of the housing sector will be invited to respond to a discussion topic. Guest posts will feature prominently on BPC’s website, as well as be shared regularly with Housing Commissioners to help inform their work.
Have a pressing question you’d like us to consider? Please leave it in the comments section. We encourage you and our expert bloggers to add comments, contributing to the national dialogue on solutions for the future of the housing sector.
Expert bloggers are not members of the BPC Housing Commission. Any views expressed on this forum do not necessarily represent the views of the Housing Commission, its Co-Chairs, or the Bipartisan Policy Center.