The year was 1986. Ronald Reagan was president, and the median price of a new home averaged just over $92,200.
People cheered Top Gun at the movie theaters and cried in front of their televisions when the Challenger space shuttle exploded 73 seconds after blastoff. The world watched the Chicago Bears win the Super Bowl, and people learned to walk like an Egyptian with the Bangles.
Thirty years. So long ago and yet not that far away.
It was also the year that Congress passed the Tax Reform Act of 1986. Included in that sweeping legislation was the establishment of an interesting little program called the low-income housing tax credit (LIHTC), which has become the nation’s most successful tool for creating and preserving affordable housing.
This special issue of affordable housing finance highlights the tax credit as the program celebrates its milestone 30th year.
Unlike so many other federal programs that have come and gone, the housing credit has flourished, proving its worth year after year. The LIHTC has helped create approximately 3 million affordable homes for families, seniors, veterans, disabled individuals, and the formerly homeless. It’s provided housing in our nation’s major metropolitan areas, coveted suburbs, and rural regions. The housing credit has also been instrumental in helping communities recover after devastating natural disasters.
It’s done exactly what Congress intended—bring in private capital investment to support the development of affordable housing for low-income Americans. A true public–private partnership.
The 30th anniversary is a good time to not only look back on all that the LIHTC has achieved but to look ahead, as well. After so many years, it’s easy to take the LIHTC for granted. That would be the kiss of death.
A new administration is moving into the White House, and new members are heading into the House and Senate, too. There’s a good chance that many of the new leaders and their staffs won’t be familiar with the LIHTC. It will be critical to reach out to them. If they see the housing credit in action and understand how it works, there’s a good chance they will become LIHTC believers.
There’s an opportunity to build on 30 years of momentum. The housing credit has been so wildly successful that a bipartisan coalition of legislators is pushing to expand it. Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah) have introduced legislation that would increase annual housing credit allocation authority by 50%, a move estimated to help create or preserve approximately 1.3 million affordable homes over a 10-year period—400,000 more units than is possible under the current program. The bill, S. 3237, would also allow income-averaging at properties in order to reach more people.
It won’t be easy to get the bill passed, just like it wasn’t easy to create the housing credit in 1986. But there would be no better way to recognize 30 years of success than with an expanded program—and 30 more years of LIHTCs.
