Low Income Housing Tax Credit creation (1986)
Congress created the Low Income Housing Tax Credit as part of the Tax Reform Act of 1986, giving states a federal incentive to spur affordable housing development. Developers receive tax credits over 10 years, which they sell to investors for upfront equity.
Dozens of affordable projects launched across the country, funded by private capital attracted by the credits.
LIHTC became the primary federal tool for producing and preserving affordable rental housing, funding nearly 3 million homes by 2020.
West Davis Family Apartments relies on this same mechanism—the 4% non-competitive credit—to make its 360 units financially viable.
