Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit

31 Pages Posted: 30 Jun 2008 Last revised: 31 Aug 2022

See all articles by Mihir A. Desai

Mihir A. Desai

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Dhammika Dharmapala

UC Berkeley School of Law; CESifo (Center for Economic Studies and Ifo Institute); European Corporate Governance Institute (ECGI)

Monica Singhal

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Date Written: June 2008

Abstract

The Low Income Housing Tax Credit (LIHTC) represents a novel tax expenditure program that employs "investable" tax credits to spur production of low-income rental housing. While it has grown into the largest source of new affordable housing in the U.S. and its structure is now being replicated in other programs, the LIHTC has also drawn skepticism and calls for its repeal. We provide estimates of tax expenditures under this program and discuss pricing, efficiency, and distributional effects of the program. We also consider the impacts of the recent financial crisis on the LIHTC program and explore implications of resulting policy changes and proposals.

Suggested Citation

Desai, Mihir A. and Dharmapala, Dhammika and Singhal, Monica, Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit (June 2008). NBER Working Paper No. w14149, Available at SSRN: https://ssrn.com/abstract=1152690

Mihir A. Desai (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
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National Bureau of Economic Research (NBER)

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Dhammika Dharmapala

UC Berkeley School of Law ( email )

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Monica Singhal

Harvard University - Harvard Kennedy School (HKS) ( email )

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617-496-6372 (Fax)

HOME PAGE: http://ksgfaculty.harvard.edu/monica_singhal

National Bureau of Economic Research (NBER) ( email )

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