Amid the greenery of suburban Maryland, Legacy at Twin Rivers is an unassuming apartment building, with clean, modern design and a pleasant landscape that you might mistake for any new, market-rate rental property in the area. And that’s the point.
At a time of skyrocketing housing costs, rising interest rates, and pressures on renters and housing providers alike to control costs, this 153-unit complex has a fitness center, homework room, accessibility features, and low-carbon footprint– and it’s affordable.
Legacy at Twin Rivers is an example of the kind of public-private partnership that’s been the hallmark of my organization, Enterprise Community Partners, for more than 40 years. Across those four decades, we’ve created or preserved over 1 million affordable rental homes. The driving force: a part of the tax code called the Low-Income Housing Tax Credit (LIHTC).
Forged in the 1980s amid a spiking homelessness crisis – not unlike today’s – and amid the national retreat from public housing, the LIHTC re-envisioned the way we do affordable housing. Rather than publicly funded and operated housing, the program provides federal tax credits for investors to put their money behind affordable homes with a commitment to keeping those homes affordable for a minimum of 30 years.
Since 1986, the LIHTC has yielded nearly 4 million affordable homes, serving around 9 million U.S. households. In many ways, it’s been a silent success. For those in the affordable housing community, it is widely recognized as the primary tool to produce and preserve affordable rental homes. Communities like Legacy at Twin Rivers fit into their neighborhoods. They support mixed-income households. They prove that when we harness the private market for public good, we can both yield returns for investors and stable, affordable homes for families and people in need.
While it’s always been true that providing homes for people on the lowest end of the income ladder has been a challenge, today it is a crisis that is broader and deeper than it’s been in generations. We’re running a shortage of 7.3 million affordable homes nationally. Along with zoning changes and building conversions, two ideas that have been in the headlines lately, the solution is simple: build and preserve.
Unfortunately, the wildly popular and incredibly bipartisan LIHTC has been cut in recent years due to congressional inaction. A legislative tax package that passed the House in a widely bipartisan vote of 357 to 70 has been held up in the Senate in partisan battles unrelated to the Housing Credit. And while so much legislation has been dividing lawmakers along partisan lines, the bill on which those housing provisions were based, has the support of half of Congress, with co-sponsorship evenly divided among Republicans and Democrats in both the House and the Senate.
Why does it remain so popular among both parties? The Housing Credit serves nearly every community in the country, from rural districts to urban areas to Tribal lands. While housing has always been a top-level concern among coastal big cities, in recent years we’ve seen the fastest rise on records of rents since we’ve been keeping track – up some 30% since 2017. And it’s afflicting not just Boston, but also Boise, Raleigh and Roanoke, exurbs and suburbs. This is now on everyone’s radar in a way it hasn’t been in years, and the LIHTC is a critical solution. Plus, our research shows that building LIHTC-supported homes increases neighboring home values. So much for NIMBYism.
The tax package currently awaiting a vote in the Senate would create an additional 200,000 affordable rentals over the next decade. Of course that’s not enough to close the gap, but combined with the kinds of reforms we’re seeing percolate in California, Maryland, Florida, and Georgia, we might be on to a long-term solution to ensuring affordability for all.
At a time when there’s little comity among the parties on Capitol Hill, the LIHTC program is a win lawmakers can take home to their districts – and one that will benefit the people they serve long into the future.
Ayrianne Parks is the Senior Director, Policy Advocacy at the national housing nonprofit Enterprise Community Partners and is co-chair of the ACTION Campaign. Enterprise is a member of the Underserved Mortgage Markets Coalition.
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