The Low-Income Housing Tax Credit

The Low-Income Housing Tax Credit (Housing Credit) is the nation’s largest and most successful tool for encouraging private investment in the production and preservation of affordable rental housing. Over the past 30 years, it has financed 3 million affordable apartments, providing homes to roughly 7 million low-income households.
In addition to the impact the Housing Credit has had on residents’ lives, our nation’s investment in Housing Credit development has had significant impacts for local economies. According to the National Association of Home Builders, the Housing Credit has generated $323 billion in local income and $127 billion in tax revenues, and has supported approximately 3.4 million jobs over the past 30 years, making the development of affordable housing an important component of our economic growth.

Though the Housing Credit has had a tremendous impact, much more affordable housing is still needed. There are still more than 11 million households in the U.S. paying more than half of their monthly income on rent, leaving too little for other expenses like health care, transportation and nutritious food. With more Housing Credit resources, we could make even greater progress towards addressing our nation’s vast and growing affordable housing needs.

Enterprise’s Housing Credit Impact

Enterprise is a national leader in socially-driven capital investment, matching investors with opportunities to yield economic returns alongside intentional and measurable impact for communities through the Housing Credit. Since 1982, Enterprise has invested $12 billion in Housing Credit equity to finance nearly 144,000 homes. Each affordable home we have helped build or preserve represents a real person or family – and a platform to the opportunity for a more stable and rewarding life.

Enterprise also co-leads the Affordable Rental Housing ACTION (A Call to Invest in Our Neighborhoods) Campaign, a national grassroots coalition of nearly 2,000 organizations and businesses calling on Congress and the Administration to protect, strengthen and expand the Housing Credit.

About the Housing Credit

The Housing Credit is a model public-private partnership built on a “pay-for-success” model. The federal government awards credits only after properties are successfully completed and occupied, and can recapture credits for non-compliance. Private sector investors – not taxpayers – bear the financial risk, and are closely involved in monitoring and oversight. The Housing Credit is also administered at the state level, and through a competitive allocation process, only the affordable housing developments that are most responsive to local housing priorities receive credits.

The Housing Credit is responsible for financing nearly all affordable housing development in the U.S. Housing simply costs too much to build for owners to charge rents that are affordable to low-income households without an incentive like the Housing Credit.

Supporting the Housing Credit

Comprehensive tax reform is a top priority for the new Congress and Administration. In order to lower corporate tax rates, both Congress and the Administration have indicated that most corporate tax expenditures will be considered for elimination, posing a major threat to the Housing Credit. Even if it is retained in a reformed code, the Housing Credit faces other threats, including reduction, potentially harmful modifications, or reduced efficacy as a result of other changes made in tax reform. One of Enterprise’s top priorities for 2017 is to ensure that the Housing Credit is protected in tax reform, and its current viability maintained.

In addition, Enterprise continues to call on Congress to strengthen and expand the Housing Credit, whether through tax reform, investments in our nation’s infrastructure or other legislation, in order to increase the availability of safe and affordable housing and revitalize local economies.

Visit the ACTION Campaign website for the latest news on the Housing Credit, advocacy tools and other Housing Credit resources.