Since it was signed into law as part of the Tax Reform Act of 1986, the Low Income Housing Tax Credit (Housing Credit) has become our nation’s most successful tool for building and preserving affordable rental housing. By providing an incentive for private sector investment, the Housing Credit has financed nearly 3 million apartments across the country for low-income workers, families, seniors, veterans, and those with special needs. It creates opportunities for the millions of families and individuals in our country today who otherwise would pay an excessive portion of their income for housing, live in substandard and overcrowded conditions, or face homelessness.
The affordable housing provided by the Housing Credit has an immeasurable impact on the lives of those who live in it, and arguably results in numerous indirect cost savings for federal, state, and local governments. That’s because housing stability leads to better health outcomes, improves children’s school performance, helps people gain employment, and promotes economic mobility.
Key to the Housing Credit’s success and its wide bipartisan support is its unique design:
- A Model Public-Private Partnership with Investors Assuming the Risk.
- State Administered with Limited Federal Bureaucracy.
- An Important Contributor to Our Nation’s Economic Wellbeing.
- A Critical Part of Our Nation’s Infrastructure.
- A Record of Exceptional Performance.
- Meeting a Need the Private Sector Could Not Otherwise Address.
- Successfully Serving the Hardest-to-Reach Populations.
Each year, federal and state housing and bond credits generate about three-quarters of the funds used to create more affordable housing in Vermont. The average Vermont resident living in apartments developed through credits has an annual income of about $18,000. About half of these households are non-seniors who are not disabled. Seventy-seven percent of these “workforce” households are working and earning their income.
Although about 7,400 Vermont households live in apartments created by credits, thousands more are in need of decent, safe apartments they can afford.