A note from Mercy Housing’s Washington DC Policy Associate – Eva Wingren
Imagine, for a moment, a world without the Low Income Housing Tax Credit. 9/10ths of the affordable housing industry’s current production capacity either sacrificed on the altar of deficit reduction, or converted to a clumsy federal program run by folks who don’t understand real estate fundamentals. We are very close to being able to close the gap between the extremely low income population and the number of affordable units available to them, but we can’t do it without the Low Income Housing Tax Credit (LIHTC).
It’s very clear from conversations in Washington that policymakers don’t always understand how much the LIHTC has done for America. Housing is taking the blame for the current financial doldrums, ignoring the fact that multifamily rental development is leading the recovery while acres of single family homes sit vacant. The LIHTC is creating the kind of housing America needs – affordable to our low to middle class workforce, near employment centers and transit, revitalizing neighborhoods that have traditionally been abandoned by investment. Far from being the inefficient corporate tax loophole it has been portrayed as in the media (by champions of urban development who should know better), it is an efficient, locally-managed, public/private partnership that hits all the buttons of a program that those who don’t like Big Government should be embracing. LIHTC outsources investment risk to the private sector, the very people best equipped to handle it. The result is better quality housing, more able to respond to market forces, that costs little to the federal government to administer.
Mercy Housing’s DC policy team knows how important the LIHTC is to our organization. We have signed on to a letter from the A.C.T.I.O.N. Network (A Call To Invest In Our Neighborhoods), a national, grassroots coalition focused on maintaining investment in affordable rental housing. Check them out at www.rentalhousingaction.org. The letter advocates two small but important legislative changes to set a fixed floor rate for the 9% and 4% credit percentages, which are useful in themselves and also provide a concrete ways for Congress to express ongoing support for the Housing Credit program.