CBO Issues Report on LIHTC and Other Federal Housing Programs
The Congressional Budget Office (CBO) recently released a report discussing the ways in which the federal government provides housing assistance to low-income households. It examined how that assistance has changed since 2000, and provided information about the households that receive assistance. In addition, the report assessed policy options for altering that assistance.
According to the report, some options would provide substantial budgetary savings over the 2016 to 2025 period considered in CBO’s analysis, and others would involve substantial costs. Options ranged from changing the number of Housing Choice Vouchers to creating a renter’s tax credit. One option looked at the ramifications of lawmakers repealing the low-income housing tax credit (LIHTC). The LIHTC accounts for most of the assistance provided indirectly to low-income households. And according to an estimate by the Joint Committee on Taxation, it accounted for $7 billion in tax expenditures in 2014 and repealing the program would increase revenues by $42 billion from 2016 to 2025.
However, CBO points out that the LIHTC offers benefits that vouchers cannot. Unlike vouchers, the LIHTC supports construction of new buildings and substantial rehabilitation of existing buildings. Furthermore, the program’s long-term compliance period ensures that units remain affordable for an extended period of time.