Making the Case for Why and Why This is Not a Possibility
On October 2, 2012, Multi-Housing News Online featured an article, “Will the LIHTC Be Eliminated?” by Keat Foong, Executive Director. As background, the Low Income Housing Tax Credit (LIHTC) legislation was enacted 16 years ago and may be one of the housing programs impacted by federal, state and local budget cuts.
At the federal level, there are a few reasons for this possibility:
Many of the long time “champions” in Congress of the LIHTC are retiring i.e. Rep. Barney Frank (D-MA) and Senator Olympia Snowe (R-ME);
Newer members of Congress may view it as part of the tax code instead of seeing it as a very effective housing tool that leverages private sector resources; and
It may be one of the tax credits eliminated through tax reforms to reduce the federal deficit.
There are also budget concerns at the state and local levels.
BUT, there also reasons to believe that the LIHTC may be safe at the federal level:
The LIHTC is not a major part of the budget;
There are no scandals attached to it;
The program has bipartisan support; and
It allows for private/public partnerships without the need for “big government” to be involved.
Some next steps that would help protect the LIHTC include making newer members of Congress aware of
The program’s “positives” and
The history of how the program came out of tax reform.