LIHTC Fundamentally Changed Production and Preservation of Affordable Housing
By Conrad Egan
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?
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The Low Income Housing Tax Credit fundamentally changed the dynamics of affordable housing in the following ways:
- It established a self-enforcing mechanism to ensure performance—the serious penalty that the investors would incur upon default—in contrast to the previous enforcement mechanisms that I, from personal experience, can attest to their inadequacy.
- It established a fair, responsible to public opinion, equitable formula for distributing the credits to the state allocating agencies and then by them to the competitive recipients.
- It established a strong, competitive and market responsive bevy of syndicators — both for and non profit, who strengthened the performance paradigm at the national, state and local level — who are responsive to free market trends.
- Thanks to strong efforts by many, led by John McEvoy, it achieved permanent status thus strengthening participant, allocator and investor support and involvement.
Truly the Mitchell/Danforth/Rangel/Rozen/Sheiner LIHTC program fundamentally changed the production and preservation of affordable housing for the better of this nation’s communities, providers and residents.
Conrad Egan is Senior Advisor for the Affordable Housing Institute.
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