Articles
Affordable Housing Testimony
Washington,
May 8, 2025
By: Chris Edwards (CATO Institute)
I testified to a House subcommittee yesterday about affordable housing. In particular, I discussed the low-income housing tax credit (LIHTC), which is a $14 billion a year subsidy program for apartment building developers. Many Republicans, I suspect, favor LIHTC because they think it is a tax cut. But if they were to look more closely, they would realize it is actually a central planning scheme that imposes vast regulations. As for Democrats, their comments at the hearing yesterday were mainly personal narratives or aspirational in nature. They have witnessed problems such as high housing costs, and they hope that federal programs can solve them. As I noted at the hearing, however, there is a difference between the promise of federal programs and how they actually work. LIHTC is supposed to expand the supply of rental units and aid low-income tenants. But as my testimony discusses, LIHTC displaces market-based housing, and much of the benefits go to developers and investors, not tenants.
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