“The way the LIHTC works is that each state is awarded a set amount of tax credits based on census information. Then, in a competitive process, for-profits, not-for-profits, and housing authorities apply for an award of credits for their projects.”
He then goes on to detail why there is a much higher demand for the LIHTC program on the East and West Coasts because they are home to the largest cities with large banks with more Community Reinvestment Act (CRA) obligations. The demand for affordable housing still exists in the rest of the country but investors there pay less for the tax credits.
Bergsman writes that affordable housing has “been trimmed enough already.” And HUD reported in August 2012 that the nation’s affordable housing stock could lose more than a million LIHTCs by 2020