President Trump Expands LIHTC in One Big Beautiful Act

President Trump expanded the Low-Income Housing Tax Credit (LIHTC) program in the One Big Beautiful Bill Act. "The One Big Beautiful Bill Act isn’t just a technical tweak – it’s a federal commitment to treating affordable housing as essential infrastructure."

The LIHTC program was created under the Tax Reform Act of 1986 during a period when other real estate tax preferences were being phased out. It was designed to encourage private investment in affordable housing by providing tax credits to developers who commit to reserving a portion of their units for low-income tenants. This initiative emerged as a response to the declining quality of public housing and the need for more sustainable solutions to the affordable housing crisis.

The LIHTC program was initially intended to be a temporary measure, but it quickly became the primary source of financing for affordable rental housing in the U.S. By the early 1990s, it was made permanent due to its success and bipartisan support.

Over the years, the LIHTC has financed approximately 3.65 million housing units. It accounts for about 90% of all newly created affordable rental housing in the country, making it a crucial tool for addressing housing shortages.

The LIHTC has played a pivotal role in shaping the landscape of affordable housing in the United States since its inception. Its ability to leverage private investment has made it a cornerstone of federal housing policy, helping to provide millions of low-income families with access to affordable rental housing. As the housing crisis continues to evolve, the LIHTC remains a critical component of the national strategy to ensure housing affordability for all.

~ Shelterforce

What the One Big Beautiful Bill Act means for LIHTC | Baker Tilly