This program provides high quality housing and services to the most vulnerable members of our society - struggling working families, seniors, veterans, people with disabilities, and the formerly homeless. It also strengthens communities across the country, providing a better life to millions of Americans. Despite this success, economic, societal, and budgetary challenges unrelated to the operation of the LIHTC program have left the nation facing an affordable housing crisis. According to the Department of Housing and Urban Development (HUD), an estimated 12 million renter and homeowner households spend more than 50 percent of their annual incomes on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and will likely have difficulty paying for necessities such as food, clothing, transportation and medical care.
One of the factors exacerbating the affordable housing crisis is the rising cost of affordable housing projects. These projects have required more resources, and subsequently more Housing Credits, recently due to increased costs of construction and real estate and sharp declines in other government funds that fill the financing gap for affordable housing. Moreover, the LIHTC program has recently put great effort into place housing developments in high opportunity areas which has led to further cost increases. These high opportunity areas mean better education, employment, transportation, security, and stability for low-income families.
NALHFA appreciates any opportunity for media attention on the nation's affordable housing crisis and applauds the recent focus on the need for greater resources to address the nation's housing needs. Unfortunately, this recent focus has also included unsupported conclusions about the sources of the housing crisis and unfair criticisms of the LIHTC program. The insinuation that the affordable housing crisis is a product of LIHTC developers collecting excessive profits and engaging in rampant corruption is simply false. State housing finance agencies strictly control all developer fees earned by the program and the data has shown the profits of investors and fees of syndicators declining significantly over the years. Syndicator fees for affordable housing programs last year amounted to just 3% of the funds raised.
"NALHFA and the industry as a whole support the responsible use of LIHTC funds and back any steps to ensure resources are appropriately used," said NALHFA President, Ron Williams. "In the program's 30 years and with over 40,000 properties, there have been only a few cases of fraud."
Since the program began in 1986, LIHTC has successfully provided approximately 3 million affordable homes to low-income families, seniors, people with disabilities, veterans, and people experiencing homelessness. NALHFA is proud of the many successful projects its members have completed using LIHTC, and believes LIHTC and other affordable housing resources should be expanded to better meet the growing demand.
"The program's record of monitoring and compliance is strong and NALHFA will continue to support all efforts to investigate and vigorously prosecute any cases of fraud in the program," said Jonathan Paine, NALHFA's Interim Executive Director. "The LIHTC program is a critical tool in combating the country's affordable housing crisis and has been proven to have helped millions of families." NALHFA is committed to working with congress and state and local agencies to protect the integrity of the low income housing tax credit program and to ensure the proper use of funds are enforced."
