The cost of housing plays a key role in the financial well-being of not only every family, but also an area’s economy. Access to affordable housing is crucial to the establishment of prosperous communities, which raises the question of what should be done when sufficient housing is out of reach for too many.
The low-income housing tax credit (LIHTC) program is the federal government’s largest tax expenditure on affordable rental housing. In Missouri, LIHTC is the state’s primary housing policy tool and its most expensive tax credit program. Despite the program’s cost and political durability, the question remains: is the LIHTC program an effective and cost-efficient approach to improving housing affordability? This report explores this question, providing details on the structure of Missouri’s LIHTC program and the economic incentives it creates, along with a discussion of the conclusions that can be drawn following the temporary suspension of Missouri’s LIHTC program from 2017 to 2019.
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