This paper discusses the debatable issue of low income housing tax credit.
This paper looks at the low income tax credit and how many believe that the federal government should do more to help the working poor gain access to affordable housing. It defines and describes the low income housing tax credit in order to explore the advantages and disadvantages presented by such a system.The author discusses how the current plan is extremely convoluted, making it difficult for developers and tenants to comply with.
“According to a report entitled The Low Income Tax Credit published by the Internal Revenue Service the low-income housing tax credit was created by Congress to promote the construction and rehabilitation of existing rental housing for the working poor in various neighborhoods throughout the United States. Congress also believed that the credit would raise the quantity of rental housing for individuals whose income is at or below certain income levels. 1 The report also states that another purpose behind the advent of the tax credit incentive, was the realization that it may be difficult for a private developer to collect rental income that was adequate enough to, pay the expenses associated with the development and maintenance of the housing, or to generate a return on investment adequate enough to produce the capitol needed to fund real estate projects.”