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Report Suggests California LIHTC Improvement

Monday, April 18, 2016 - 1:30PM

A report issued last week by the California state auditor says the state’s low-income housing tax credit (LIHTC) appears to be achieving its purpose, but suggests a change to make it more effective. The report says the California state LIHTC, which has funded the development of nearly 60,000 affordable rental homes since 1987, could be improved if it were made transferable. Citing Assembly Committee on Revenue and Taxation’s analysis of previously introduced legislation, the report says allowing developers to sell state credits to investors instead of partnering with them would improve the value of the state credit, and ultimately lead to funding additional affordable rental homes without additional forgone revenue to the state. The report evaluated six of the largest California tax expenditures and made suggestions for improvement.

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