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University of Baltimore Journal of Land and Development

Abstract

The Federal Low-Income Housing Tax Credit (LIHTC) program is currently the nation's largest federal subsidy for the development and rehabilitation of affordable housing, having created or preserved over 2.5 million housing units and distributed over $7.5 billion in federal tax credits to developers of and investors in affordable housing from the program's inception in 1986 through 2007. However, despite its monumental size and impact, the program has some potentially fatal flaws that threaten the long-term financial and physical viability of the very affordable housing that it creates, and threatens the health of the neighborhoods that it is created in. Affordable housing projects built today are routinely constructed in communities that are already geographically segregated, overburdened with debt due to unnecessarily high up-front development fees and other debts, and simultaneously limited in the amount of rental income they can generate.

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