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low-income housing tax credit
Trump-GOP Tax Bill a Gift to 'Predatory Landlords' That Will Worsen Already Dire Housing Crisis
"Housing programs are among the important public services being targeted for significant cuts to fund tax giveaways for billionaires and their wealthy donors," warned one group.
May 15, 2025
House Republicans' proposed budget reconciliation package will make mortgages expensive and harder to obtain, a progressive tax policy group warned Thursday, while over 30 advocacy groups sounded the alarm over the Trump administration's gutting of federal agencies and programs, moves that are exacerbating the U.S. housing crisis.
Americans for Tax Fairness (ATF) said that the proposed permanent extension of expiring portions of the Tax Cuts and Jobs Act (TCJA) signed into law by President Donald Trump during his first term would grant massive tax breaks to big corporations and the ultrawealthy, "wasting trillions of dollars that could help solve our country's affordable housing crisis."
"The deficit-financed tax cuts would also increase interest rates, making housing less affordable," ATF added. "To the extent the tax cuts are not added to the deficit, housing programs are among the important public services being targeted for significant cuts to fund tax giveaways for billionaires and their wealthy donors."
"They are paving the way for more predatory landlords to jack up rent."
ATF's assertion is supported by a report published in February by the Economic Policy Institute finding that "large, deficit-financed tax cuts would put upward pressure on inflation and interest rates, slowing growth and causing pain to households," including by making borrowing for a home more expensive.
ATF noted that extending the TCJA's weakened low-income housing tax credit (LIHTC) could result in 235,000 fewer affordable housing units over 10 years.
"Trump's tax scam reduced the financial incentive for corporations—the largest LIHTC investors—to make equity investments in the tax credits by slashing the corporate tax rate to 21%, and adopting a stingier measure of inflation," the group said.
"One of the most regressive provisions in the 2017 Trump-GOP tax law is the so-called 'opportunity zone' tax break," ATF contended. "While proponents claimed it would encourage investment in low-income neighborhoods, it has instead been ruthlessly exploited by wealthy real estate investors."
"In fact, this program has failed to deliver the promised economic opportunity to underserved communities, instead turning many of these neighborhoods into what can more accurately be described as exploitation zones," the group added.
The Lever's Luke Goldstein and Katya Schwenk reported Tuesday that the reconciliation package's proposed restrictions on state governments passing new regulations on artificial intelligence technology "could kill crackdowns on real estate management company RealPage for raising rents and contributing to the country's housing crisis."
RealPage is accused of price gouging renters via AI-powered surveillance pricing and automated insurance denials and management systems.
"Not only are House Republicans giving their billionaire donors and large corporations a massive tax handout, they are giving RealPage and bad actors like them a free pass to rip off working families," Lindsay Owens, executive director of the economic justice group Groundwork Collaborative, said Wednesday.
"They are paving the way for more predatory landlords to jack up rent, more apps to drive down gig worker wages, and more retailers to hike prices on consumers," Owens added. "The GOP tax bill tells you everything you need to know about the Republican Party's priorities and how unserious they are about lowering costs for working families."
More than a dozen states have joined a class action lawsuit accusing RealPage of using AI to artificially inflate housing prices across the nation.
Also on Thursday, more than 30 housing, consumer, and civil rights groups warned that the Trump administration's deep cuts to federal agencies and programs—spearheaded by the so-called Department of Government Efficiency—"are worsening the nation's housing crisis."
"Our families, neighbors, and communities deserve better than these untenable and unconscionable proposals."
"The Trump administration promised to address the high cost of housing, but so far has proposed policies that will increase the cost of rent, shred the nation's housing safety net, and push more people into homelessness," National Low Income Housing Coalition interim president and CEO Renee Willis said in a statement.
"At a time when more people than ever are struggling to afford the cost of rent and a record number of people are experiencing homelessness, rolling back fair housing protections and cutting funding for rental assistance, homelessness services, and affordable housing development—and gutting the workforce responsible for administering these programs—will only create more hardship," Willis added. "Our families, neighbors, and communities deserve better than these untenable and unconscionable proposals."
In a wider critique of Trump's policy proposals, U.S. Sen. Bernie Sanders (I-Vt.) said Thursday on social media: "Wages are stagnant. Housing costs are soaring."
"Many young people will never be able to afford their own homes, but Trump wants to increase the bloated military budget by $150 billion," Sanders added. "WRONG. That money should go toward building the affordable housing that we desperately need."
US Affordable Housing Policy Works for Wall Street and Rich Developers, Not Renters
Current policy doesn’t make sense if the goal is to provide affordable housing; if the goal is to create market conditions beneficial to real estate developers and investors, it appears to be working quite well.
May 17, 2024
Affordable rental housing policy fails to provide sufficient affordable rental housing decade after decade, yet policymakers continue to do largely the same things. A researcher at the Joint Center for Housing Studies recently observed that in 1960, about 45% of renters in the bottom income quintile spent more than 50% of their income on housing costs. Today, it is about 65%. Renters below the official poverty line spend on average 78% of their income on housing. At what point will policymakers admit that their policies have failed renters?
It Doesn’t Make Sense: The Low-Income Housing Tax Credit
Affordable rental housing policy now primarily relies on the Low-Income Housing Tax Credit (LIHTC). LIHTC seems like a rather bad idea if one is interested in addressing the affordable rental housing crisis. LIHTC has a number of problems, but two of them should be considered fatal flaws. First, LIHTC is not very good at providing low-income rental housing. The Joint Center for Housing Studies states, “LIHTC does not necessarily protect a renter from cost burdens” and that “lower-income renters living in LIHTC units often require additional subsidies to make this housing affordable.” The primary policy to create affordable rental housing does not do a very good job at creating affordable rental housing, yet policymakers rely on it more and more.
The second major problem is that LIHTC rentals typically convert to market rate after 30 years (in some cases 15 years). This transition rate might be reasonable if there were an adequate supply of affordable rental housing, but there isn’t. The National Low-Income Housing Coalition estimates that the United States has a shortage of 7.3 million rental homes for the lowest-income renters. The Joint Center for Housing Studies finds that the country lost 2.1 million rental units for these lowest-income renters between 2012 and 2022. Affordable rentals are too scarce to allow them to be converted to market-rate housing.
The current estimate is that 325,000 LIHTC rental units will transition to market rate by 2029. LIHTC creates a rental housing bucket with a hole in the bottom. Since more and more of our affordable rental housing is created by LIHTC, the amount of affordable rentals lost to market conversion will increase over time. The United States already does not build enough affordable rental housing to keep up with demand, but policymakers have created a system that will lead to accelerating losses of affordable rental housing over time. This doesn’t make sense.
Affordable Rental Policy Is Working Well for Corporations and Investors
Current affordable rental housing policy doesn’t make sense if the goal is to provide affordable housing. If the goal is to create market conditions beneficial to real estate developers and investors, it appears to be working quite well.
Public housing, especially when adequately funded, is a far more effective method of providing affordable rental housing than LIHTC. The rate of cost-burdened renters is quite low in public housing—much lower than in LIHTC housing. Because of this fact, there are very long waiting lists and tremendous demand for public housing.
From the private real estate industry’s perspective, public housing is a serious threat. “From the beginning, the real estate industry bitterly fought public housing of any kind,” Richard Rothstein stated in The Color of Law: A Forgotten History of How Our Government Segregated America. Rothstein adds that the industry later lobbied to structure public housing so that it would be underfunded. Today, after the passing of the Faircloth Amendment, Congress has prohibited the increase in the number of public housing units built by the federal government in spite of the fact that people are, in some cases, waiting for decades to get into public housing.
In addition to investors receiving more and more via tax credits from the LIHTC program, the Joint Center for Housing Studies reports that corporate owners make up a growing share of the rental housing market. (The corporate share of rental properties ranging from 5 to 24 units nearly doubled between 2001 and 2021.) More private equity firms have also moved into the rental housing market. While more and more renters are being cost-burdened, it appears that more corporations and investors are making good profits.
It is possible to create affordable rental housing policies that work well for renters. There are good social housing models in Europe and Asia. Social housing is nonprofit housing. In the European models, it is not restricted to just the lowest income households, which tends to provide it with a stronger political and economic base. The good news is that U.S. city and state governments are beginning to explore these models. In Congress, Reps. Alexandria Ocasio-Cortez (D-N.Y.), Cori Bush (D-Mo.), and Becca Balint (D-Vt.), Sen. Bernard Sanders (I-Vt.), and other members of Congress have recognized the need to repeal the Faircloth Amendment. Once that amendment is gone, the federal government can move toward constructing affordable, quality social housing.
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