Report Recommends Improvements to LIHTC Program
The Center on Budget and Policy Priorities recently released a report entitled, “Low-Income Housing Tax Credit Could Do More to Expand Opportunity for Poor Families.” The report finds that LIHTC housing is disproportionately concentrated in higher poverty and racially concentrated neighborhoods. The report suggests improvements for the LIHTC program that could support low-income families’ access to low-poverty neighborhoods.
The report encourages states to use their Qualified Allocation Plans (QAPs) to more strongly support LIHTC development in low-poverty, high-opportunity neighborhoods. QAPs describe the states’ criteria for awarding tax credits to developers. The report also highlights potential improvements to the LIHTC program to better serve the lowest income renters who often cannot afford LIHTC rents, especially in low-poverty neighborhoods. A recent change allows some LIHTC units in a development to be affordable for households with incomes at 80 percent of area median income (AMI) as long as other LIHTC units have lower rents, making the average rent limit affordable at 60 percent AMI. It is hoped that this approach will provide more units affordable to lower income households.
The report encourages states to require LIHTC developments to set aside some units for extremely low-income families and to provide subsidies from other programs like the national Housing Trust Fund and the HOME Investment Partnership program to help pay for them.
The report also recommends that owners of LIHTC properties in low-poverty neighborhoods inform public housing authorities about housing available for voucher holders in LIHTC properties. Public housing authorities and other organizations should also find ways to provide financial assistance to voucher holders for security deposits and moving expenses.