Quoting from an excellent, detailed article on the implementation of Low Income Housing Tax Credits in West Oakland, Pittsburg, PA: “With 9% [of the project funded by] LIHTC alone, the city would need nearly a century to fill its current shortage.”
Low Income Housing Tax Credits (LIHTC) are the core of an American national funding program for affordable housing born decades ago out of Thatcherite conservatism — a belief small government, anchored on trust that private enterprise operating unfettered in free markets could better accomplish most, if not all, social tasks better than wasteful, inefficient big government.
That ‘private enterprise can do it better’ philosophy included the construction of housing affordable to households with low incomes. LIHTC is the (seriously underfunded) result.
After some 35 years, the verdict is pretty much in on LIHTC, as it also is across the Atlantic with similar Thatcherite programs funded by the United Kingdom. The Public Private Partnerships (PPP) that were formed to utilize government funding do indeed work, but only after a fashion.
Complex interactions are necessary between the host of public and private partners that contribute to the success of a LIHTC project. Ultimately, they would appear to be as wasteful and time consuming as previous ‘big government’ managed construction projects such as public housing.
As to the results: LIHTC projects produce disappointingly small quantities of truly affordable housing units, and are founded on a requirement that they will return to the free market.
For an easy-to-understand, personalized account of the strengths and weaknesses of one LIHTC project, read more in PUBLICSOURCE: Developing aFfordable Housing Isn’t Easy. The Story Of This Oakland Complex Shows What It Takes.