WHY HAS CONGRESS CREATED THE TAX CREDIT PROGRAM?

There is a nationwide shortage of affordable housing. In 1991, The Center on Budget and Policy, estimated that there was a shortage of 4.2 million units of affordable housing, up from a shortage of 1.2 million units in 1978. Congress and the White House have agreed that the most effective way for America to provide the much needed affordable housing is through Tax Credits and other government incentives that encourage individual taxpayers and corporations to invest.

Through the assistance of these government programs, properties can operate at lower costs, based on the rents that people on fixed and modest incomes can afford. Since there exists an ever-growing need for affordable housing, these properties are usually fully occupied and often have substantial waiting lists.

Furthermore, unlike public or welfare-managed housing, Tax Credit properties are all privately owned and managed and have the right to select qualified tenants that will pay the required portion of their income for their housing. Because desirable affordable housing is very hard to find, the owners and tenants in these properties have numerous incentives to keep them well maintained.