The Low-Income Housing Tax Credit (“LIHTC”) creates a channel for private investment in affordable housing. Investors partner with developers to build low-income housing projects: they provide the up-front capital needed for construction and receive a ten-year stream of tax credits generated by the property. Banks are the largest investors in LIHTCs, motivated primarily by the Community Reinvestment Act (“CRA”). The homogeneity of the investor pool renders the affordable housing market susceptible to shifts in investor demand. The financial crisis slashed revenues across the country, reducing demand for tax credits. While the market has begun to recover, communities outside of CRA assessment areas still receive less LIHTC financing.

This article proposes that individual investment in LIHTCs could diversify the market and funnel funds into areas that struggle to finance affordable housing projects. Mirroring the role of statutorily-motivated banks, socially-motivated investors may increase stability in these markets. An online crowdfunding platform could aggregate individual contributions in order to raise sufficient equity financing. While there are certain legal and administrative obstacles to this method, individuals may provide an exciting new foundation for low-income housing investment.