Long-Term Low Income Housing Tax Credit Policy Questions

Harvard Joint Center for Housing Studies

LIHTC: Looking beyond any lingering problems in investment demand for tax credits left over from the broader financial crisis, there are a number of longer-term questions about the future of the Low Income Housing Tax Credit (LIHTC) program that policy makers, advocates, policy analysts, and industry leaders have raised. This paper is a follow-up to a companion paper1 that discusses in more detail the disruption in the LIHTC market that resulted from the financial crisis, the implementation and effectiveness of the two stopgap measures promulgated in the American Recovery and Reinvestment Act (ARRA), and proposals for supporting investor demand and pricing going forward.2 Like that paper, this one is based on interviews with over two dozen industry experts, a review of analyses conducted by others, and a focus session with leading stakeholders held in
November 2009. This paper additionally benefits from the input of industry experts during a teleconference in December 2009. Though the intention of this brief paper is to discuss long-term questions that have been posed concerning the future of the LIHTC program, further analysis would be required before having sufficient information to act on any of them.