Advisory Center for Affordable Settlements & Housing

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Document Type General
Publish Date 29/09/2010
Author
Published By University of Chicago Press
Edited By Suneela Farooqi
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USA: The Low Income Housing Tax Credit

The Low Income Housing Tax Credit (LIHTC) represents a novel tax expenditure program that employs “investable” tax credits to spur the production of low‐income rental housing. While it has grown into the largest source of new affordable housing in the United States and its structure is now being replicated in other programs, the LIHTC has also drawn skepticism and calls for its repeal. We provide estimates of tax expenditures under this program and discuss pricing, efficiency, and distributional effects of the program. We also consider the impacts of the recent financial crisis on the LIHTC program and explore the implications of resulting policy changes and proposals.

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