To describe 2025 as the Tax Super Bowl doesn’t do justice to the opportunity it represents for affordable housing.
With the looming expiration of the Tax Cut and Jobs Act on December 31, 2025, the stage is set to adjust the tax code and, with it, changes to the low-income housing tax credit (LIHTC). The implications for low- and moderate-income individuals and families, developers, contractors, state housing agencies, syndicators, and affordable housing investors could not be more timely or profound. By all accounts, it’s a generational opportunity.
Since its inception in 1986, the Housing Credit has financed the development of 3.85 million affordable rental homes in urban, suburban, and rural areas, according to the National Council of State Housing Agencies.
“We have the potential to now transform the housing tax credit,” explains Robert Golden, Chief Executive Officer of Boston Financial, which oversees the nation’s largest syndicated LIHTC portfolio, managing $16.2 billion in equity across nearly 1,900 properties.
“Affordable housing is a mainstream issue now, with both sides of the political aisle talking about it,” Golden observes. And for good reason: The number of cities where a starter home topped $1 million in 2019 was 84. Today? It’s ballooned to 237. For extremely low-income households, the housing situation is dire, with a growing shortage of 3.9 million affordable rental units. Similar housing scarcities prevail for other low-to-moderate area median income groups as well.
What should Congress do to make LIHTC an even more powerful affordable housing tool? How do you make your voice heard over the din of competing industries and interests? Golden offers several ideas:
Key Asks
Broadly speaking, anything that enhances the tax credit and increases affordable housing production is welcome. Specifically, Golden says Boston Financial supports the advocacy of the Affordable Housing Tax Credit Coalition (AHTCC), including the group’s support of:
- Restoration of the expired 12.5% allocation increase
- Lowered bond financing threshold test
Strengthening investor interest is also a priority. For example, Golden believes it’s time to consider extending the tax credit’s carry back period. “Right now, it’s one-year. If Congress improved that to three years that would give investors more certainty that they can claim the credit. Increasing placed-in-service deadlines at the federal level would assist, too. That helps with state credit allocations and makes everyone’s lives easier.”
One Voice
Congressional committees will have their hands full considering a torrent of tax change asks from many competing industries. Golden advises that affordable housing advocates speak with one voice on LIHTC. “Anytime you try to get legislation passed, it’s best to coalesce as one. The AHTCC is a good resource to stay focused and informed.”
A Caution
The AHTCC recommendation also serves another purpose. “We’ve seen over the years how seemingly favorable things coming out of tax legislation can cause unintended consequences,” Golden warns. “We have one chance to get this right. All the more reason for the industry to speak with one voice.”
Secret Weapon
Golden knows affordable housing has the wind at its back. Even so, it doesn’t hurt for industry leaders and affordable housing developers to play a can’t-miss card: Invite their Senator or U.S. Representative to tour a tax credit project. “Invite them to a ribbon cutting. Let them see firsthand how residents’ lives are impacted and improved,” Golden says. “Representatives who visit a project become tax credit supporters.”
Super Bowl Outcome
“This is a once in a generation opportunity to transform the tax credit” Golden concludes. “It’s humbling to think the credit helped create and preserve over three million affordable homes over the last 38 years. It’d be great to see six million more over the next 38.”
Learn more about how Boston Financial supports affordable housing.
