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Guest Blogger Paul Dribin: “Affordable Housing Development Moving Forward”

**A Special Feature on the Future of the Low Income Housing Tax Credit Program**

The Low Income Housing Tax Credit Program (LIHTC) has been the major driver of affordable housing for many years. By many indicators, it is a success, providing thousands of units to low income households who desperately need the housing. The program should be preserved and strengthened. Yet, by itself, the LIHTC Program is an ineffective affordable housing tool.

I say this with the highest respect for the practitioners of the program. But by standards for both efficiency and effectiveness, the program falls short. It is expensive to put together, complicated, and lengthy. There are numerous third parties who get a piece of the action. It is virtually incomprehensible to the lay man. It has also been subject to the roller coaster effect of the economy. In an effort to make the program attractive to the private capital markets, the costs have been expensive.

Similarly, the program is relatively ineffective. It houses a relatively small segment of the low income housing population; the relatively higher end low income market. It is not usable for very low income households who cannot afford to pay the rent. Similarly, the program is difficult to make work in rural areas due to the fair market rent structure. In the end, I believe the tax system should be used to collect revenue and not as a social carrot.

So in the end the LIHTC Program is expensive, confusing, and does not house the persons who need housing the most. Sounds kind of like our health care “system.” Again, I do not want to eliminate or change the program, but simply add to it.

So what should we add to it? I recommend versions of programs already used. I would re institute the Below Market Interest Rate FHA Multifamily Program. Writing down the interest rate for affordable housing appears to be an efficient and relatively inexpensive alternative. Similarly, I recommend a strengthening of the HOME Program as an equity tool. Projects should be developed that mix market rate with affordable tools and maximize housing populations in greatest need. Both these programs would meet the standard of being more affordable and housing a wider range of low income households than the Low Income Housing Tax Credit Program.

Paul Dribin is currently an independent consultant. Mr. Dribin has dedicated his career to solving issues of affordable housing and community development by specializing on the development and management of multifamily properties.

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