What do homeless veterans, farmworkers, small towns devastated by natural disasters, and the mentally ill all have in common?

While you ponder that, here’s another riddle: What do Native Americans, youths aging out of foster care, the formerly homeless, and neighborhoods decimated by the single-family foreclosure crisis have in common?

Let me redirect the question further: What do all of these groups, plus low-income seniors, victims of domestic violence, and artists have in common? (I could go on.)

The low-income housing tax credit (LIHTC).

As the following pages attest, the LIHTC is a small but powerful assist delivered to an increasing number of populations. When I say small, I mean that its outcome is so much greater than its cost: A humble federal outlay easily achieves a broad multiplier effect.

And when I say powerful, I mean the program was originally aimed only at garden-variety low-income families. But ever since the Reagan administration, in a stroke of genius, included the LIHTC in the Tax Reform Act of 1986, it has become so much more to so many more.

The program isn’t even 30 years old, and yet, it has become the Swiss Army knife of U.S. housing policy. Some call it a Christmas tree upon which all of the nation’s most challenging housing problems are strung, one by one, like tinsel. Others dub it a Band-Aid stretched, too thinly, 3,000 miles wide to help heal the nation’s most pressing social ­challenges.

Whatever the analogy, an argument could be made that the LIHTC is the most successful ­public–private program in U.S. history. Since its inception, the program has built more than 2.7 million rental homes, and each year, the LIHTC supports about 95,700 jobs, according to the National Association of Home Builders.

Administered by states and tailored to their most pressing needs, the credits are given to developments only in the amount they need to be viable. The program leverages private dollars so effectively that there’s minimal risk to the federal government. But even if the government were on the hook, there’d be little to no risk: LIHTC communities have the lowest default rate of any real estate sector in the country, commercial or residential.
Yet, if there’s one thing I could change, it would be the name. The words “tax credit” are innocuous enough, but everything that comes before it does the program a disservice in the court of public opinion.

First, instead of “low-income,” why not use a word like “affordable,” with its class neutrality and universal appeal?

Second, there’s a reason our culture uses the terms “home builder” instead of “house builder,” or “homeowner” instead of “houseowner.” And there’s a reason we don’t use the word “houselessness,” even though that’s a much more accurate description of the problem. A “home” is an abstract concept, but a house is a physical structure, four walls and a roof—and that’s what’s needed.

Yet, you won’t find the word “houseless” in the dictionary. Why? Because the word “homeless” is emotive and has its own sense of accuracy, one that drills much deeper and touches us more profoundly; it describes the empathy we all feel toward those suffering the inhumanity of poverty.

But whatever you call it—the affordable home tax credit (my vote), the Swiss Army knife of housing policy, a Christmas tree, a Band-Aid—a program by any other name would still dig as deep, and reach as far and wide, as the LIHTC.