The Impact of Low-Income Housing Tax Credits on Affordable Housing in Texas

November 9, 2018 | by Laura Ross

Categories: Affordable Housing, Rental Housing

Low-Income Housing Tax Credits (LIHTCs) play a vital role in the development and preservation of affordable rental housing for low-income households.

According to a 2017 article, LIHTCs fund roughly 90% of the country’s affordable housing developments. LIHTCs provide the key mechanism for providing equity in an affordable housing development. Without them, most affordable housing developments would not be financially possible.

The coalition, A Call to Invest in Our Neighborhoods (ACTION) Campaign, recently released new data showing the positive impact of LIHTCs on affordable housing across the country. The report covers a 30-year period between 1986 and 2016, and details the impact of tax credits on affordable housing across the country. It notes that nationwide, housing tax credits have financed more than 3 million apartments since 1986, providing affordable homes to 7.2 million low-income households.

In Texas specifically, the fact sheet shows:

  • 290,272 homes have been financed with LIHTCs
  • These homes provide 676,333 low-income households an affordable place to live

There are two types of housing tax credits: competitive (9%) and non-competitive (4%). The state of Texas' housing tax credit program is administered by the Texas Department of Housing and Community Affairs.

TSAHC’s Involvement in Tax Credits

While TSAHC doesn’t administer tax credits, we are involved in the 4% tax credit program. Developers that use our Multifamily Tax-Exempt Bond Program must also use 4% tax credits as another source of equity to finance their project. 

TSAHC is one of only two statewide issuers of multifamily tax-exempt housing bonds, which are used to finance the development and preservation of affordable rental housing. We use our multifamily bonds to address the following targeted housing needs:

  • At-Risk Preservation and Rehabilitation
  • Rural and Smaller Urban Markets
  • Senior and Service Enriched Housing Developments
  • Disaster Relief Housing

To date, TSAHC has issued more than $730 million in multifamily tax-exempt bonds in conjunction with 4 % LIHTCs to build or preserve 29 affordable rental developments across Texas.

For more information on TSAHC’s Multifamily Tax-Exempt Bond Programs, click here.

On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.

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