Examining Whom the Low-Income Housing Tax Credit Program Serves
In this column, Michael Hollar, senior economist in the Economic Development and Public Finance Division of HUD's Office of Policy Development and Research, discusses the report, “Understanding Whom the LIHTC Serves: Data on tenants in LIHTC units as of December 31st, 2015.”
What was the impetus for filing this report, and what kinds of data does it collect?
The impetus for the report was the Housing and Economic Recovery Act of 2008 (HERA), which requires HUD to collect data on tenants of properties financed by the low-income housing tax credit (LIHTC) from the state housing finance agencies, and to release the data annually. This report is how HUD satisfies the requirement to publicly release the information. The data that we collect for this report focus specifically on characteristics of tenants in LIHTC-financed units, such as their race, ethnicity, age, household composition, household income, and rental payments.
What need do these HERA reports meet that hadn't been satisfied previously?
Prior to HERA, the LIHTC program, which is administered separately by each of the states, did not have a single source of information on tenants assisted by the LIHTC. Although some states released information prior to HERA, any state reporting was not uniform across states. The HERA reports help us to understand who is assisted by the LIHTC nationally, as well as in each state.
How do the reports assist researchers and policymakers?
The research provides a better understanding of the families assisted by the LIHTC program, especially in terms of their income. We know that the LIHTC program has income limits for tenants that differ from some of HUD's housing assistance programs. However, before the HERA reporting, we didn't know the extent to which household income of LIHTC tenants differ from household’s participating in HUD’s programs.
What is the most significant limitation of the data?
The most significant limitation is that we don't know exactly how complete the data are. As I mentioned, the LIHTC program is administered by different housing finance agencies in each state, and while these agencies report the number of LIHTC properties to the Internal Revenue Service (IRS), the IRS isn't allowed to release that information for taxpayer privacy reasons. So we don't have a complete accounting of the total active stock of LIHTC units and properties.
How has the data collection improved since the inaugural HERA report was released?
We know that the data are more complete now than they were in the first couple of years of the data collection. It took a few years for the state housing agencies to update the computer systems through which they receive the tenant information from the LIHTC properties. In order to fully comply with the mandate, the housing finance agencies had to collect and report more information, both in terms of number of units that are reported and also the breadth of tenant information. For example, many housing finance agencies weren't collecting data on the race or disability status of tenants. To help them collect and store this required information, the housing finance agencies’ tenant income certification forms as well as their compliance computer systems had to be amended. Thus, even though we still don't know if 100 percent of units and properties are reported to us, we do know that the data submitted has become more complete over time.