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Policy Brief: How Can States Encourage Affordable Housing in High-Opportunity Neighborhoods?

Jill Khadduri, Principal Associate & Senior Fellow

White Paper

May 1, 2013

The Low Income Housing Tax Credit (LIHTC) is a federal program administered by the Treasury Department that subsidizes the development of rental housing projects for low-income households. It is the predominant “supply-side” or “project-based” component of U.S. rental housing policy, while the “demand-side” or “tenant-based” component is the Housing Choice Voucher program, which provides subsidies that households can use to rent housing units they find in the private market. The LIHTC has developed about 2.4 million units since it was created by the Tax Reform Act of 1986. The housing voucher program currently assists about 2.5 million households with some overlap, since vouchers are often used to rent units in LIHTC projects.

The report “Creating Balance in the Locations of LIHTC Developments: The Role of Qualified Allocation Plans,” is a more in-depth follow-up to a 2008 report that surveyed “best practices” in state qualified allocation plans around the country. It was supported by Abt Global and the Poverty & Race Research Action Council.