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Low-Income Housing Tax CreditsThe Low Income Housing Tax Credit (LIHTC) program has quietly become the primary method of rental housing production for lower-income Americans. Since its inception in 1986, the program has produced over 1.5 million affordable units, housing about 3.5 million Americans. The credits leverage approximately $6 billion in private investment in affordable housing each year. Annual federal tax expenditures for LIHTC were an estimated $3.5 billion in 2003. Rents are set at levels affordable (i.e. not more than 30 percent of gross income) to families at 50 or 60 percent of area median income. Even at this level, however, tax credit units remain unaffordable to very low and extremely low-income families. As such, developers of affordable housing often choose to combine other forms of subsidy (Section 8 vouchers, HOME funds) with tax credits when creating mixed-income housing development deals.
From the NAHRO Monitor:
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