Addressing the Housing Affordability Crisis: Tax Code Reform

As America and Dallas grapple with an unprecedented housing affordability crisis, advocacy for the expansion and reform of federal spending through the tax code is a timely and necessary call to action. The National Low Income Housing Coalition (NLIHC) advocates for a strategic expansion and reform of existing programs, focusing on the Low-Income Housing Tax Credit (LIHTC) and the introduction of a targeted renters' tax credit. This approach aims to make housing affordable for millions of individuals and families facing dire economic circumstances. DCH would like to explore how these changes would benefit the lives of millions. 

About NLIHC 

NLIHC's works to ensure that the lowest-income individuals in the United States have access to affordable homes. It is comprised of a diverse membership, which includes housing coalitions, nonprofit providers, homeless service providers, fair housing organizations, and citizens. NLIHC strives to address the pressing need for affordable housing. Nationwide, a staggering shortage of 7.4 million rental homes exists for the lowest-income seniors, veterans, people with disabilities, and families with children. With only 35 affordable homes available for every 100 of the lowest-income individuals, the underfunding of crucial rental housing programs leaves three-quarters of those in need without any housing assistance, pushing many to the brink of homelessness.

Low-Income Housing Tax Credits (LIHTC):

The Low-Income Housing Tax Credit (LIHTC) is a cornerstone of the national affordable housing program in the United States. The NLIHC outlined a need within the existing LIHTC program to ensure that it reaches those with the greatest need. With deeper income targeting, the NLIHC is looking to expand the program's contribution to affordable housing options for extremely low-income individuals and families.

How does this work in practice? This initiative provides tax incentives to developers and encourages the construction and rehabilitation of affordable rental housing. The reality of deeper income targeting is that there would be a more deliberate focus on those who are financially strained, resulting in a more effective distribution of resources. 

Renters Tax Credits:

In addition to the reforming of the LIHTC, the NLIHC supports the creation of another deeply targeted renters' tax credit. A refundable renters' tax credit could help close the gap between income and housing costs, that is currently too wide and rapidly widening. Many are faced with the impossible choice between paying rent and meeting other essential needs, such as food on the table or affording healthcare.

A refundable renter’s tax credit would help alleviate the financial burden faced by low-income individuals and families, by putting money back. This initiative also fosters a more equitable housing landscape. 

Follow the NLIHC and news and updates of the house and senate as they enact or fail to enact policies to alleviate housing pressure. In order to protect and strengthen programs that address the need for affordable homes and support the workforce and middle class, tax reforms can play a big role in reducing housing costs and promoting more equitable housing.