LIHTC turns 25
This year marks the 25th anniversary of the inception of the Low-Income Housing Tax Credit Program as part of the Tax Reform Act of 1986. The annual Housing Credit Conference, sponsored by the National Council of State Housing Agencies (NCSHA) and held earlier this month, was dedicated to this significant milestone. Plenty of past accomplishments were reviewed and projections made for what is needed to continue its success. I was in attendance at this event yet again and will be sharing the highlights with you here over the next few months.
It was pointed out in the opening plenary that rental housing is considered to be a viable alternative to homeownership under the current economic environment. There are even those who believe that providing stable affordable housing may be one of the best strategies to alleviate many of our social problems. Because of the economic instability we’ve experienced in recent years, there has been a dramatic increase in the number of renter households. And the number of families considered to be bearing a severe cost burden for housing — paying greater than 50% of their monthly income for basic housing expenses — has risen from 20% of renters in 2001 to 26% in 2011.
The Housing Credit Program stands nearly alone in replenishing the nation’s affordable housing stock to help alleviate the weight of this predicament. Over the last 25 years 2.4 million affordable homes, representing approximately 120,000 units per year, have been created or preserved using LIHTC. Why has it been so successful?
The top three answers given to this question were: strong state administration, strong public/private partnerships, and true cohesion of all industry groups. Early legislative proponents who believed in affordable housing as a fundamental concept were also cited as critical in getting the program off and running to a solid start. And the bipartisan support component cannot be overlooked, either, as LIHTC has been cited as appealing to the basic instincts of Democrats and Republicans, even if for different reasons.
So how does the future look for LIHTC? Program proponents are urged not to be complacent in their support. Emphasis on program success stories and job creation are considered to be key in maintaining strength. Also educating members of Congress, many of whom do not understand the fundamentals of affordable housing, should be a top priority for those who are vested in its continued viability. Perhaps with these efforts we can gain a new cadre of housing champions in the legislature to pave the way for future generations and 25 more years of accomplishment for LIHTC.