Tax Credit Advisor Special Edition Article, A Different World: An America without the Low-Income Housing Tax Credit
By Caitlin Jones
2 min read
Tax Credit Advisor — June 2013 — Born a little over a quarter-century ago within the 1986 Tax Reform Act, the federal Low-Income Housing Tax Credit (LIHTC) has become the tent pole around which the nation’s entire affordable rental housing delivery system has been restructured — a system vastly different from and better than the HUD-centric model which dominated before. More than circumstance, this is due to core features that make LIHTC, for public-policy and practical reasons, a much better funding source for the development and preservation of affordable apartments for families and seniors than direct federal appropriations. The LIHTC program has benefits (risk transfer, collectible recapture, and outcome-based regulation) that appropriated programs cannot duplicate. LIHTC’s benefits are multi-dimensional — to financing and delivery, renters and markets, cities, and housing policy. Based on my 37 years in the affordable housing business, including involvement with virtually every federal housing program to come along, it is clear to me that if the LIHTC program had never existed, the nation would be much worse off across four principal dimensions of societal and economic health. In his article, David A. Smith, Chairman of Recap Real Estate Advisors, describes what the U.S. would look like today — and be sorely missing — if the Low-Income Housing Tax Credit program had never existed.
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