Dirty Words: Why the LIHTC Needs a New Name

As an editor, words are my currency, and that passion is both a blessing and a curse.

I have a difficult time reading menus at restaurants, for instance, because I almost always find a typo. And though I’m hard-wired to think of this as productive, waiters never seem to appreciate my suggestions.

But as a trade journalist—and one who often writes about finance—acronyms and jargon hold a special place in my heart. I knew I‘d arrived as a financial journalist when I could say “bips” and not “basis points,” for instance, or “Lie-tex” instead of “low-income housing tax credits” (LIHTCs).

That last example, though, always sticks in my throat—and remains stuck there today in hopes of a linguistic Heimlich maneuver.

Now, the LIHTC is an amazingly powerful tool, a stroke of brilliance emanating from the 1986 Tax Act that encourages public-private partnerships to build our nation’s affordable housing stock. The credit—aka Sec. 42 of the IRC (the code’s longest section, by the way, and that’s saying something)—is responsible for developing at least 2.8 million homes over the last 30 years.

As an industry, we need more every year to keep up with seemingly endless demand.

But the LIHTC needs something from us, too—it needs a new name. Because perception is reality (and realty), and reality doesn’t look kindly on “low-income” households.

The LIHTC is only about 30 years old, and yet, it’s overdue for a day at the spa. Just as every bill proposed in Congress has some altruistic title that obscures its true intent—The Americans for Homemade Apple Pie and Rent Deregulation Act—so too does the LIHTC need a makeover.

Ask any LIHTC developer what happens if you approach a local politician or neighborhood group with the words “low-income housing tax …”

Well, you didn’t have them at the word “go”—you lost them at the word “low.” And before you can even say “credit,” somebody utters “not in my backyard. (NIMBY)”

But what if, instead, you approached a politician or grassroots group with “The Affordable Home Tax Credit”? We could shorten it to TAHTC (pronounced “tactic”). Maybe that’s too obvious. How about the Home Creation Tax Credit? No, that would be pronounced “hectic,” and things are hectic enough already.

How about: The American Dream Tax Credit. No acronym, no explanation needed.

The NIMBY argument, then, becomes about denying the American Dream—a dream that’s priceless, regardless of a household’s net worth. And the word “home” is as emotive as it gets—it’s why we say “homeowner,” and why there’s no such word as “houselessness.”

If you couch the tax credit in those terms, then maybe our society’s ingrained prejudice against the poor gets redirected to the angels of our better nature.

By renaming the credit, we can shift the debate from desperation to aspiration, from prejudice to pride, from graffiti to white picket fences—from low income to hardworking.

What’s in a name? What isn’t? Words really do matter.

Sure, a tax credit by any other name would be as powerful, and desperately needed. But would it sound as sour at a charrette?

What would you call it if you had the chance? Let me know at jascierto@hanleywood.com or in the comments section below.