CFED Scorecard

CFED Assets & Opportunity Scorecard

Preservation of Affordable Rental Housing Reports & Graphics Policy Brief

Overview

States that Require LIHTC Affordability for 30 Years

With roughly 53% of renters in the United States spending one-third or more of household income on housing costs, the need for affordable rental housing remains high. The Low Income Housing Tax Credit (LIHTC) is the largest source of federal subsidy to promote affordable housing in the United States. This tax credit provides incentives for developers and owners to build and preserve the affordable housing stock, particularly in large urban areas. It works by reducing the tax liability of developers and owners who build or own rental housing for families who earn less than 60% of area median income. Although federal tax credits are designed to incent 30 years of affordability, developers and owners of LIHTC-financed properties can opt out after only 15. States, however, can restrict the ability to opt out, thus ensuring longer-term preservation of affordable housing.

What States Can Do

Each year, state housing finance agencies (HFAs) must submit Qualified Allocation Plans to the federal government that describe how the HFA will distribute tax credits among developers of affordable housing projects. Although most states give preference to developers that maintain affordability for longer than the federally-mandated 15 years, those states that set a minimum standard of 30 years of affordability, with no opt-out, are most effective at preserving affordable rental housing. 

Strength of State Policies: Preservation of Affordable Rental Housing

Does the state require tax credit recipients to
maintain affordability for at least 30 years? 1
State30 year LIHTC affordability
required?
Alabama   
Alaska   
Arizona   
Arkansas   
California   
Colorado   
Connecticut   
Delaware   
District of Columbia   
Florida   
Georgia   
Hawaii   
Idaho   
Illinois   
Indiana   
Iowa   
Kansas   
Kentucky   
Louisiana   
Maine   
Maryland   
Massachusetts   
Michigan   
Minnesota   
Mississippi   
Missouri   
Montana   
Nebraska   
Nevada   
New Hampshire   
New Jersey   
New Mexico   
New York   
North Carolina   
North Dakota   
Ohio   
Oklahoma   
Oregon   
Pennsylvania   
Rhode Island   
South Carolina   
South Dakota   
Tennessee   
Texas   
Utah   
Vermont   
Virginia   
Washington   
West Virginia   
Wisconsin   
Wyoming   

Notes on the Data

1. Marla Nelson and Elizabeth Sorce, "Supporting Permanently Affordable Housing in Low-Income Housing Tax Credits," National Community Land Trust Network, January 2013.

What States Have Done

Although nearly all states encourage extended affordability in some manner, fewer than half (22 states) require at least 30 years of affordability. Two states—New Hampshire and Utah—require developers receiving the Low Income Housing Tax Credit funding to maintain affordability in perpetuity. 

Acknolwledgements

CFED thanks Melora Hiller and Emily Thaden from the National Community Land Trust Network for their input and expertise on this policy issue.

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