Do housing tax credits work as well as they could?

Opinion by Scott Littlehale : sfexaminer – excerpt

In the first half of 2020, investors in Idaho based housing developer Pacific Builders were awarded $200 million in California tax subsidies in exchange for an estimated $179 million in private financing to create new housing units. The company will also get an estimated $46 million in developer fees from these projects.

Nearly half of California’s current annual affordable housing production comes from similar arrangements — a complex Reagan-era financing tool, called Low Income Housing Tax Credits, or LIHTC. LIHTCs are public subsidies — credits against future tax liabilities — that are paid to wealthy private investors who put up the money to create affordable units…

This current formula seems like a great deal for wealthy builders and investors. But it’s simply not working as well as it should for millions of working Californians struggling with housing costs…

To build enough of the housing that California needs now, we should start by examining and reforming the multi-billion dollar financing tools we currently have in place. We must ensure taxpayers are getting more of the housing investments they’ve paid for through tax subsidies to wealthy investors, and reduce the number of housing construction workers that require housing assistance themselves.cCalifornia’s current Low Income Housing Tax Credit system is an ideal candidate for this kind of scrutiny.…(more)

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