The Low-Income Housing Tax Credit Program: A Multicity Rent Savings Analysis

The paper utilizes actual Low-Income Housing Tax Credit (LIHTC) rents rather than federally mandated maximum rents to evaluate LIHTC rent savings in 12 diverse housing markets across the United States. Monthly rent savings are greatest in large cities with strong housing markets (Chicago, Illinois; Miami, Florida; San Jose, California; and Washington, DC), ranging from $708 for a new one-bedroom unit in Miami to $1,114 for a new two-bedroom unit in San Jose. Monthly rent savings in mid-sized cities with weaker housing markets (Albuquerque, New Mexico; Buffalo, New York; Indianapolis, Indiana; and Louisville, Kentucky) and small cities with stronger housing markets (Manchester, New Hampshire, and Midland, Texas) are comparable, ranging from $108 for a new one-bedroom unit in Midland to $725 for a new three-bedroom unit in Indianapolis. Rent savings are considerably less in small cities with weak housing markets (Sioux Falls, South Dakota; and Billings, Montana). Meanwhile, nationwide, rent savings decline as properties age.