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Overview and proposed reforms of the low-income housing tax credit program

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  • Eriksen, Michael D.
  • Lang, Bree J.

Abstract

•The Low-Income Housing Tax Credit (LIHTC) cost US taxpayers $8.4 billion in 2017.•The LIHTC subsidizes up to 103% of non-land development cost of rent-restricted units.•States receive equal per-capita allocations regardless of whether housing is affordable.•Future allocations should be made refundable and targeted to markets with greatest need.

Suggested Citation

  • Eriksen, Michael D. & Lang, Bree J., 2020. "Overview and proposed reforms of the low-income housing tax credit program," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:regeco:v:80:y:2020:i:c:s0166046217302508
    DOI: 10.1016/j.regsciurbeco.2018.07.002
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    References listed on IDEAS

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    1. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    2. Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1253-1296.
    3. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-377, May.
    4. Lang, Bree J., 2012. "Location incentives in the low-income housing tax credit: Are qualified census tracts necessary?," Journal of Housing Economics, Elsevier, vol. 21(2), pages 142-150.
    5. Eriksen, Michael D. & Rosenthal, Stuart S., 2010. "Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 953-966, December.
    6. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    7. Freedman, Matthew & Owens, Emily G., 2011. "Low-income housing development and crime," Journal of Urban Economics, Elsevier, vol. 70(2-3), pages 115-131, September.
    8. Lang, Bree J., 2015. "Input distortions in the Low-Income Housing Tax Credit: Evidence from building size," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 119-128.
    9. Eriksen, Michael D., 2017. "Difficult Development Areas and the supply of subsidized housing," Regional Science and Urban Economics, Elsevier, vol. 64(C), pages 68-80.
    10. Baum-Snow, Nathaniel & Marion, Justin, 2009. "The effects of low income housing tax credit developments on neighborhoods," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 654-666, June.
    11. Malpezzi, Stephen & Vandell, Kerry, 2002. "Does the low-income housing tax credit increase the supply of housing?," Journal of Housing Economics, Elsevier, vol. 11(4), pages 360-380, December.
    12. Keri-Nicole Dillman & Keren Mertens Horn & Ann Verrilli, 2017. "The What, Where, and When of Place-Based Housing Policy’s Neighborhood Effects," Housing Policy Debate, Taylor & Francis Journals, vol. 27(2), pages 282-305, March.
    13. Sinai, Todd & Waldfogel, Joel, 2005. "Do low-income housing subsidies increase the occupied housing stock?," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2137-2164, December.
    14. Eriksen, Michael D., 2009. "The market price of Low-Income Housing Tax Credits," Journal of Urban Economics, Elsevier, vol. 66(2), pages 141-149, September.
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    Cited by:

    1. Céline Grislain-Letrémy & Corentin Trevien, 2022. "The Long-Term Impact of Housing Subsidies on the Rental Sector: the French Example," Working papers 886, Banque de France.

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