Overview and Proposed Reforms of the Low-Income Housing Tax Credit Program
24 Pages Posted: 8 Mar 2018 Last revised: 27 Jul 2018
Date Written: July 3, 2018
The Low-Income Housing Tax Credit (LIHTC) program provides a subsidy to developers who construct or rehabilitate rent-restricted housing units for 30 years. The program cost the US Government over $8.4 billion in lost tax revenue in 2017 and there is bipartisan support to expand future allocations by up to 50%. We provide an overview of the program and merits of the proposed increase in allocations. The analysis concludes by offering two alternative policy proposals that would increase the annual number of units subsidized under the program without increasing the aggregate dollar amount of allocations.
Keywords: Affordable Housing; Tax Credits; Housing Policy; Tax Reform
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