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Cato scholar tells House panel LIHTC mainly flows to developers and investors, not tenants
Summary
At a House Oversight subcommittee hearing, Cato Institute economist Chris Edwards and other witnesses said the Low‑Income Housing Tax Credit is complex, raises per‑unit costs and frequently benefits investors and developers; witnesses and members differed on causes and policy remedies.
WASHINGTON — At a hearing on federal welfare and housing programs, Chris Edwards of the Cato Institute testified that the Low‑Income Housing Tax Credit (LIHTC) — the principal federal tax incentive for affordable rental housing — largely benefits developers and investors rather than low‑income tenants and can raise per‑unit construction costs.
Edwards, who occupies the Kilts Family Chair in Fiscal Studies at the Cato Institute, told the subcommittee that LIHTC provides roughly $14 billion a year in tax credits and that the program’s complexity drives higher costs. “LIHTC is an incredibly complex program with vast amounts of regulations,” he said, noting industry guides exceed…
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