FINANCING AFFORDABLE HOUSING IN THE UNITED-STATES

This article addresses the problem of the gap in affordable housing in the United States and the efforts being made to address the gap. At i ssue are the forms of federal financial support for affordable housing and the relative roles of private, for-profit suppliers; local public housing agencies; and nonprofit, community-based developers in provid ing affordable housing. The primary U.S. vehicle for affordable housin g production is currently the low-income housing tax credit. While thi s system has produced nearly 350,000 units of low-income housing, it h as inherent inefficiencies relative to a direct capital grant and curr ently requires assembling mortgage financing from a number of sources. Congress and the Clinton administration have been reluctant to encour age much additional development by public housing agencies, and the ca pacity of nonprofit, community-based developers is still limited. Expe riments are under way on a variety of credit enhancement and risk-shar ing techniques.