Affordable Housing

In many parts of the country, there is a severe shortage of affordable and workforce housing. Supply constraints, often related to restrictive state and local policies, exacerbate the problem. 

The impact of this growing undersupply of affordable housing is far-reaching and undermines economic growth – particularly in urban areas.

Position

We are continuing to work on improving housing affordability by supporting smart policies that incentivize builders, developers, and owners to build more affordable housing for low-and middle-income tenants. 

The low-income housing tax credit (LIHTC) is regarded as one of the most successful public-private partnership programs in history. The Roundtable supported its initial passage and continues to support efforts to expand the program. 

The Roundtable is also exploring other potential policy ideas to expand the supply of housing such as a property conversion tax credit, which would help offset costs involved in converting old office buildings into new and affordable housing units.

To increase housing supply, the reform of the Government-Sponsored Enterprises (GSEs) – Fannie Mae and Freddie Mac – must focus on supporting underserved areas and mortgages to aid low- and moderate-income families with home ownership and rental housing, instead of imposing new regulations such as rent control.

Background

The federal government provides housing assistance through a variety of programs—portable vouchers that can be used in the private market; project-based rental assistance that provides subsidized rent in designated, private buildings; and subsidized rent in publicly owned buildings (public housing). In addition, the low-income housing tax credit (LIHTC) subsidizes the production of rental housing for income-eligible tenants. 

Created in the Tax Reform Act of 1986, LIHTC was made permanent in 1993 and further strengthened during the Bush and Obama administrations. In practice, states receive LIHTC credit authority, which then is allocated competitively to developers who build or rehabilitate rental housing for low-income tenants. 

Since its enactment, LIHTC has financed the development of nearly 3.5 million apartments, providing homes to approximately 8 million low-income families. 

An expanded LIHTC could create and preserve more than 2 million additional affordable homes, support 3 million jobs, and generate $119 billion in sustainable tax revenue.

Resources
MORE ISSUES
MORE ISSUES
Affordable Housing
Expanding Housing Supply: Fannie Mae & Freddie Mac
Low Income Housing Tax Credit (LIHTC)
IRS Limitations on Private-Activity Bonds (PABs)
"YES In My Backyard" (YIMBY)
Surplus Federal Real Estate for Affordable Housing