As required by the Housing and Economic Recovery Act of 2008 (HERA), the General Accountability Office (GAO) of Congress has conducted a study of the impacts of HERA on the Low-Income Housing Tax Credit Program. Findings of the study were generally positive, with the most significant criticism in the area of HUD data collection relating to the LIHTC program. Following are the general conclusions of the study.
The LIHTC program is the largest federal program for building and rehabilitating affordable rental housing and provides billions of dollars in tax credits each year. Through HERA, Congress made a number of changes to the program and sought analysis of credit allocations made before and after the Act’s implementation. However, limitations in available program data hamper this type of analysis and potentially other research that could be useful to policymakers. HUD is not required to collect data on LIHTC projects and has no administrative responsibility for the program, but it has collected information for some HFAs for many years. The information has been used to examine important issues, such as the extent to which subsidized housing remains affordable over the long-term and the potential for coordinating requirements across federal housing programs. However, the GAO was critical of the completeness of HUDs database and the lack of follow up to obtain complete information. For this reason, GAO believes that the federal government’s ability to evaluate basic program outcomes – such as how much housing was produced – and other aspects of federal housing policy may suffer.
The GAO recommendation stated that the importance of the LIHTC program to federal housing policy underscores the need for continued attention to data quality and completeness. For this reason, GAO recommended that HUD (1) evaluate options for improving the completeness of the LIHTC database; and (2) take additional steps to improve the data.
While the GAO was critical of some aspects of data collection efforts relating to the LIHTC program, it is noteworthy that GAO stressed the importance of the program to overall federal housing policy. Program participants, especially HFAs, developers and management agents, should work to educate their Senators and Representatives – as well as locally elected officials – on the value of the program. It is especially important to stress that the LIHTC is the most effective and efficient model for providing the number of affordable rental housing units necessary to come close to affordable housing needs.