The Low Income Housing Tax Credit (LIHTC) program is the country’s largest source of federal subsidy for affordable housing. Since its inception, the program has financed more than 2.2 million housing units, accounting for about one-sixth of all rental housing in the country. Limited affordability periods, and the ability for property owners to “opt out” of the program after 15 years, have raised concerns about the loss of affordable units to market rate conversion, particularly in strong housing markets. Organizations that provide permanently affordable housing, often referred to as “shared equity” models, can ensure the affordability and stewardship of LIHTC housing in perpetuity and preserve public subsidies. In turn, the LIHTC program can more effectively utilize public dollars by funding the permanently affordable housing sector. Based on a review of Qualified Allocation Plans (QAPs) for all fifty states and Washington DC, this report identifies policies and preferences states have adopted to guide the allocation of LIHTC resources that can support permanently affordable housing.

Permanently affordable housing (PAH) is housing that is affordable to low- and moderate-income households now and in the future. The PAH sector includes both permanently affordable rental units and shared equity homeownership units. Shared equity homeownership models—including community land trusts (CLTs), limited equity cooperatives and long-term deed restricted housing programs restrict the price for which a home is sold to the first lower income buyer and every subsequent lower income buyer to preserve affordability in perpetuity. Ultimately, these homeowners and the stewarding organization agree to share the rights, responsibilities, risks, and rewards of homeownership. In this report, non-profit and government organizations with shared equity homeownership programs are referred to as “PAH organizations.”