A Look at the Housing Credit’s Success on Its 27th Anniversary
By Ali Solis
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.
As the Low-Income Housing Tax Credit (Housing Credit) enters its twenty-eighth year, it boasts a remarkable track record of doing exactly that which it was intended to do – producing 2.6 million safe, decent affordable homes for low-income households and counting. But its impacts go far beyond the construction of these homes: it has created over 3.6 million jobs and leveraged over $100 billion in private investment since its inception, to name a few. The Housing Credit doesn’t just do its job. It has actually exceeded the expectations established for it by Congress.
The Housing Credit bridges the best of the public and private sectors by combining an important mission and critical safeguards with market discipline and local control. The resulting track record has resulted in the Bipartisan Policy Center’s Housing Commission recommending not only that Congress protect the Housing Credit, but expand it by 50 percent over its current allocation in order to meet affordable needs that outpace the rate of affordable housing construction.
Its effectiveness and efficiency have also earned the Housing Credit a long history of bipartisan support. A recent op-ed in Roll Call by former U.S. Representative and Enterprise Community Partners Trustee Rick Lazio, “A Tax Credit Both Parties Can Get Behind,” highlights some of the reasons that support for this program bridges the partisan divide even in a highly polarized political climate: “The Housing Credit promotes job growth, strengthens communities, leverages private capital, encourages federalism, sidesteps bureaucracies and holds stakeholders accountable. If Republicans were to design an affordable housing program from scratch today, it would look like the Housing Credit.”
While we have learned a tremendous amount from the Housing Credit’s success, we have also learned that we cannot take it for granted. The Housing Credit faces its most serious risk in decades as Congress seeks to eliminate tax credits and deductions in tax reform in order to lower rates. We keep hearing from members of Congress that “everything is on the table” – and having a strong record is not enough to keep a program in the tax code. Nor is the need for the program enough to protect it, despite the fact that 8.5 million households are considered to have worst case housing needs and the Housing Credit is increasingly relied upon to support other types of affordable and assisted housing.
The Housing Credit’s 27-year track record speaks for itself. But as Congress moves ahead on tax reform, the Housing Credit’s future depends on whether enough stakeholders speak up for it – sharing the story of its success with Congress and urging that they preserve this critical resource for years to come.
Ali Solis is a senior vice president at Enterprise Community Partners
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.