Celebrating the Low-Income Tax Credit Investment in Affordable Rental Housing
“Why shouldn’t the tax system be used for a socially desirable goal like housing low-income people in America?” – Former U.S. Department of Housing and Urban (HUD) Secretary Jack Kemp speaking about the Low-Income Housing Tax Credit.
Saturday, October 22, 2016 marks the 30th anniversary of the creation of the Low-Income Housing Tax Credit (Housing Credit), our nation’s primary tool for encouraging private investment in affordable rental housing.
On October 22, 1986, President Reagan signed the Tax Reform Act of 1986 into law, authorizing the Housing Credit with bipartisan support.
Over the past 30 years, the Housing Credit has enabled the development of over 2.9 million apartments, which have provided affordable homes to roughly 6.7 million low-income families.
Enterprise Community Partners also celebrates 30 years of using the Housing Credit to provide opportunity for low-income families: we’ve invested over $11 billion in Housing Credit equity to finance nearly 140,000 affordable homes.
Senator George Mitchell (D-ME), who helped to create the Housing Credit in 1986, said ten years ago that “the program is exceeding our expectations in every respect” and that even its supporters in Congress did not “envision that it would become the most successful affordable housing program ever created in this country.”
In a recent Enterprise Housing Horizon blog post, Enterprise’s Emily Cadik and Olivia Barrow write:
“Though the Housing Credit and other federal housing assistance programs have had a tremendous impact, our nation still faces vast and growing affordable housing needs. Over 11.4 million low-income households still pay more than half of their income on rent, leaving too little for other necessities like transportation, health care and food.
Earlier this year, Senator Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT) introduced the Affordable Housing Credit Improvement Act of 2016 to expand the Housing Credit by 50 percent and enact other provisions to further strengthen the program.
This legislation is critical: while the affordable housing crisis has grown, the Housing Credit has not been expanded since 2000. Enterprise and our partners will continue to work to expand the Housing Credit so that it can have an even greater impact in its fourth decade.
“By building more affordable housing units across the United States, more people can have a shot at the American Dream,” said Senator Maria Cantwell (D-WA.)
Kilmer Homes in Edison is a classic example of the benefits of Tax Credits.
Enterprise’s mission is to create opportunity for low- and moderate-income people through affordable housing in diverse, thriving communities.