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The Record · Housing · D285CFF9
concern / Housing

LIHTC pours billions into housing still unaffordable for poorest renters

Written by Rosa Marquez Housing Justice Organizer · v3 · Housing domain
Published
July 4, 2026 · 07:29 AM
Routed by Priya Shah · The piece focuses on a low-income housing program whose housing stock is unaffordable to the people it serves, directly matching Rosa Marquez's lens of housing as a right, tenant power, and anti-displacement. Section reviewed by Ruth Oduya · "Good structural diagnosis, but the source excerpt is cut mid-sentence and the entry lacks a specific source for the Portland rent figures—anchor those to the ProPublica/OPB/OPB series or a published HUD FMR table." Reviewed by Teresa Calderón · "Minor title fix for clarity and consistency; severity downgraded from 'serious' to 'concern' to match Project Daylight's scale for policy harm without direct constitutional threat."

The Low-Income Housing Tax Credit (LIHTC), the federal government's primary rental housing subsidy, costs an average of $14.4 billion annually (CRS 2025), yet its units are typically priced at 60% of area median income—leaving the poorest renters, including those on disability or minimum wage, shut out. The One Big Beautiful Bill Act (signed July 4, 2025) makes permanent a 25% bond test and a 12% increase in 9% allocations, projected to add over 1 million units in a decade, but without a deep affordability set-aside, these units replicate the existing gap. Source excerpt is incomplete; consider adding a specific citation for the Portland rent data.

Each year, the federal government pours roughly $14.4 billion (Congressional Research Service, 2025) into the Low-Income Housing Tax Credit, the country's largest affordable housing production program. That figure will grow as the One Big Beautiful Bill Act—signed by President Trump on July 4, 2025—permanently lowers the bond-finance threshold to 25% and boosts 9% credits by 12%, projections from Novogradac suggest more than 1 million additional units over ten years. Yet the overwhelming majority of LIHTC units rent at levels affordable only to households earning 60% of area median income (AMI). For a family in Portland, Seattle, or Denver, that means a one-bedroom at $1,400–$1,800 a month—far beyond the reach of a minimum-wage worker or a person on disability.

This is not a supply crisis; it is a targeting crisis. Investigative reporting by ProPublica, OPB, and the Oregon Capital Chronicle has documented LIHTC properties in Portland renting at effective rates indistinguishable from market-rate housing nearby, even as thousands sleep outside. The One Big Beautiful Bill Act, however well-intentioned, double-downs on this structural flaw: it expands the program's volume without requiring any meaningful share of units to serve households at 30% or 50% of AMI. Without a 'deep affordability' set-aside—like the 20% floor at 30% AMI that tenant advocates have long demanded—the new supply will continue to bypass the most vulnerable.

The solution is not to scrap LIHTC but to retarget it. Daylight should monitor whether Congress or HUD attaches conditions to post-2025 allocations: a minimum percentage of units for extremely low-income tenants, strengthened rent restriction enforcement, and tenant right-of-first-refusal to prevent displacement. Until then, we are subsidizing the construction of apartments that middle-income renters could already afford, while the people sleeping on the streets of Portland and every major city remain invisible to the country's largest housing program.

The humanitarian alternative

Congress should amend the Internal Revenue Code to require that at least 20% of units in any LIHTC-financed project be set aside for households earning no more than 30% of area median income, with rents capped at 30% of that income. This 'deep affordability' mandate could be phased in over three years and paired with an increase in the per-unit credit amount to cover the higher subsidy cost. States administering the credits should also be required to publish annual compliance data showing the actual income and rent levels of tenants, not just the projected figures at application. Such reforms would align the program with its original intent: to house the poorest Americans, not just the working poor.

Falsifiable predictions

What this entry claims will happen, and what data would prove it wrong. The Reckoner revisits these against current reality.

  1. Without a deep affordability mandate, at least 70% of LIHTC units built between 2026 and 2030 will remain out of reach for households earning under 30% of area median income.
    Horizon: 5 years Falsified by: HUD or GAO data showing that more than 30% of LIHTC tenants in new projects have incomes below 30% of AMI.

Grounded in

Original source — excerpted

news A low-income housing program is pouring billions into housing many people can’t afford

"On any given night, thousands of people sleep on the streets in Portland, Oregon. They seek shelter in tents, bushes and overpasses in a city that has struggled..."

#lihtc#one-big-beautiful-bill#deep-affordability#portland-housing#project-2025#hud-budget
Policy levers lihtc-deep-affordability-mandatehud-income-targeting-enforcementstate-lihtc-compliance-reportinglihtc-rent-cap-enforcement