Since the creation of the Low-Income Housing Tax Credit (LIHTC) in 1986, the community development movement has concentrated its resources (political power, talent, and funds) on multi-family, low-income rental housing. Originally designed to harness corporate dollars for the restoration or construction of multi family rentals, LIHTC was an easy fit with the thousands of empty, hulking apartment buildings that were so prevalent in the urban landscape of 1980s America. When community development corporations and investors realized that thousands of new and rehabbed units could be entirely financed through this cookie-cutter program, much of the community development movement began to shift toward low-income rental housing production.
To date, LIHTC has created 2.5 million affordable rental units, and the program accounts for the vast majority (approximately 90 percent) of affordable rental housing built in the US today. A vast ecosystem of lenders, syndicators, designers, lawyers, and builders has developed to facilitate and profit from this program. In under a decade, LIHTC became the most productive affordable housing finance tool in urban America. LIHTC consistently receives bipartisan support, and states and local governments rely heavily on this program to realize their community development goals.
While LIHTC has galvanized the multifamily rental housing community, the same kind of muscle has simply not been cultivated around affordable single-family housing. Consequently, US cities with a preponderance of low density housing stock have not experienced the level of reinvestment experienced by larger, higher-density metropolitan areas.
The NHIA Coalition's goal is to create a financing tool for single-family housing, as powerful as LIHTC, to help transform neighborhoods across the country. We believe the creation of this new financing tool will not only drive much needed resources to investment-starved communities, but it will also enlarge and elevate the nascent affordable, single-family housing development industry that was catalyzed by events like Hurricane Katrina and the mortgage foreclosure crisis.