Solutions for the LIHTC Program

orange_arrow.png What needs to change in the LIHTC Program?

Low Income Housing Tax Credits are handed out according to the priorities set in the Qualified Allocation Plan developed by CHFA. Because this allocation is determined at the state level, Connecticut has considerable control over how the program is used. For over 10 years advocates have urged CHFA to change the LIHTC program to bring balance to the allocation of credits. While some modest changes have been made, much more needs to be done to remedy the way the program has been administered since its inception in 1986.

The LIHTC program needs to be reoriented to prioritize higher opportunity developments that create housing choice and lower opportunity developments that contribute to neighborhood revitalization or provide other benefits.

We propose an Opportunity Leveraging Approach, which prioritizes LIHTC allocations to take advantage of other community and investment resources (see Figure 2, below):

  • 60% of credits should be prioritized for non-age restricted developments in higher opportunity areas.
  • 15% of credits should be prioritized for age-restricted projects in higher opportunity areas.
  • 25% of credits should be prioritized for catalytic projects in areas of "moderate" and "lower" opportunity.
  • If an otherwise qualifying higher opportunity development is not prepared to move forward due to zoning issues and a Conn. Gen. Stat. Sec. 8-30g appeal is pending, the development will receive priority consideration for credits when the case is resolved.
  • If an insufficient number of applications obtaining threshold points for either priority area is submitted, the remaining credits would become available largely without regard to opportunity area location.

To learn more about opportunity areas, click here.

LIHTC_Proposed_Distribution_of_Credits.png

  • Open Communities Alliance
  • 75 Charter Oak Avenue
  • Suite 1-210
  • Hartford, CT 06106
  • Phone: 860-610-6040