Rental Housing

Observations on the Low-Income Housing Tax Credit Program Gao ID: RCED-90-203 August 14, 1990

Pursuant to a congressional request, GAO reviewed the Low-Income Housing Tax Credit Program, focusing on: (1) the estimated cost to the Treasury of low income housing tax credits awarded from 1987 through 1989; (2) whether the awarded tax credits resulted in reduced rents in credit-assisted units; (3) whether tenants were selected from waiting lists maintained by public housing authorities; (4) the adequacy of existing compliance monitoring requirements; (5) the adequacy of current statutory provisions designed to prevent noncompliance; and (6) alternative tax credit allocation formulas.

GAO found that: (1) the total projected tax credit granted from 1987 through 1989 was about $5.7 billion, and was expected to be used between 1987 and 2000; (2) investors had not been using tax credits to reduce total unit rents, but frequently supplemented subsidies with the amounts they collected from tenants; (3) there was no legal requirement requiring investors to select tenants for credit-assisted housing from waiting lists that public housing agencies maintained, except under one program; (4) state credit agencies were required to give evaluation preference to project proposals planning to use waiting lists as a source of tenant referrals; (5) monitoring requirements were not adequate to ensure compliance; (6) Treasury dispensed billions of dollars in federal subsidies almost solely on the basis of recipient taxpayers' self-certification; (7) statutory program provisions did not effectively discourage noncompliance with program requirements; and (8) there were numerous options potentially available to allocate states' respective shares of credit.

The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.