The Hidden Subsidies of the Low-Income Housing Tax Credit Program

Bree J. Lang and Edgar O. Olsen

National Tax Journal, 2025, vol. 78, issue 3, 577 - 608

Abstract: The Low-Income Housing Tax Credit is the largest program subsidizing the construction and rehabilitation of low-income housing in the United States. The usual measures of the taxpayer cost of this program ignore many subsidies other than tax credits provided to the developers of tax credit projects. This paper documents and estimates these hidden subsidies using data from project applications in California from 2009 to 2016. We estimate that the taxpayer cost of the program is about three times larger than the cost of federal tax credits alone.

Date: 2025
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