The Low-Income Housing Tax Credit (“LIHTC”) is the nation’s largest affordable housing development program. From its inception, policymakers have seen the program’s potential path to homeownership as one of its advantages. In fact, the Internal Revenue Code anticipates tenant and cooperative purchases of LIHTC-financed affordable housing. But the program has never achieved significant homeownership for low-income families. Meanwhile, residents in increasing numbers of LIHTC developments face instability related to investor acquisitions of rental housing and the expiration of restrictions that keep rents affordable—instability that resident ownership could prevent. This Article explores why LIHTC has not achieved greater homeownership opportunities and describes how one model could finally expand eventual tenant ownership in the program. This would not only improve housing security but enable low-income families to build wealth, representing a step toward equity in federal housing policy. At the same time, the limits of this model reflect limits to federal housing policy’s approach to assisting low-income families, relative to the benefits available to higher income families.
* Assistant Clinical Professor of Law, University of California, Irvine School of Law. Thank you to Gautam Hans, Carrie Hempel, Anika Singh Lemar, Ryan Nunn, Collin Raymond, Bob Solomon, Brandon Weiss, and David Wohl for comments and suggestions. I am also grateful for feedback received at the Clinical Law Review Writers’ Workshop, a faculty workshop at the University of California, Davis School of Law, and from clinical faculty and students at Yale Law School. This project would not have been possible without research assistance from Gabriel Gassmann and Kriti Ramakrishnan.
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