July 31, 2017 8:30AM

Questions the Senate Finance Committee Should Ask

By Vanessa Brown Calder

On Tuesday, the Senate Finance Committee will hold a hearing to discuss affordable housing. The committee will debate whether to expand the Low‐​Income Housing Tax Credit (LIHTC), a program that ineffectively subsidizes affordable housing. A bill co‐​sponsored by Senator Cantwell and Senator Hatch would expand the program by 50%.

Unfortunately, the program usually sidesteps scrutiny because it is not part of the discretionary budgeting process. But the Senate Finance Committee has a unique window of opportunity to ask hard questions of LIHTC during the hearing. As a result, Tuesday’s hearing is arguably more important than usual.

What questions should the senators ask? Below are a list of ten questions to get the conversation started:


  1. Does LIHTC subsidize units that would be provided by the private market in its absence? How will the program improve the real number of affordable housing units produced?


  1. Why should Congress expand a program that GAO reports is not well managed? How does this bill increase oversight?


  1. Is LIHTC a band‐​aid solution for destructive local zoning and land use regulation policies? Should states be required to reduce local land use and zoning regulation in order to qualify for LIHTC?


  1. How will the bill reduce the amount that developers benefit from LIHTC?


  1. How does the bill improve the cost‐​effectiveness of LIHTC? Is LIHTC the most cost‐​effective way to subsidize housing? (Research suggests it is not.)


  1. Why must LIHTC be used in conjunction with other subsidies?


  1. Will non‐​profit developers continue to be provided preferential treatment in the credit allocation process? Even if they are less efficient at building affordable units?


  1. Given finite federal resources, why does LIHTC subsidize moderately low‐​income individuals rather than extremely low‐​income individuals?


  1. Why aren’t Housing Finance Authorities (HFAs) required to monitor project compliance during the latter half of the 30 year “extended use” period?

  2. How will the bill reduce corruption and fraud?

It’s essential that LIHTC is given the scrutiny it deserves. The Senate Finance Committee should make sure it happens.