Tax Policy and the Economy
Vol. 24, Issue 1, Pages 181-205
2010
Abstract
The Low Income Housing Tax Credit (LIHTC) represents a novel tax expenditure
program that employs “investable” tax credits to spur production of low-income
rental housing. While it has grown into the largest source of new affordable
housing in the U.S. and its structure is now being replicated in other programs, the
LIHTC has also drawn skepticism and calls for its repeal. We provide estimates
of tax expenditures under this program and discuss pricing, efficiency, and
distributional effects of the program. We also consider the impacts of the recent
financial crisis on the LIHTC program and explore implications of resulting
policy changes and proposals.
Citation
Desai, Mihir, Dhammika Dharmapala, and Monica Singhal. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit." Tax Policy and the Economy 24.1 (2010): 181-205.