NMHC/NAA Viewpoint: The proposed Workforce Housing Tax Credit (WFHTC) would complement the successful Low-Income Housing Tax Credit (LIHTC). Although LIHTC should be provided with significant additional resources, middle-income households are also facing severe cost burdens that cannot be addressed without a new, dedicated resource. The WFHTC program is necessary to construct workforce housing that working households can afford.
The Workforce Housing Tax Credit (WFHTC) is a proposal to establish a public/private partnership that leverages federal dollars with private investment to produce rental housing affordable to our nation’s workforce.
Designed to complement the successful Low-Income Housing Tax Credit (LIHTC), the WFHTC program would enable state housing agencies to issue credit allocations to developers that would subsequently be sold to investors. Investors would receive a dollar-for-dollar reduction in their federal tax liability over a 15-year period, and developers would invest the equity raised to build apartments. The equity raised would cover 50 percent of the cost of constructing of qualifying units. A development project eligible for WFHTC would have to set aside 60 percent of units for households earning 100 percent or less of Area Median Income (AMI) and must be kept affordable for up to 30 years.
Housing affordability is a significant challenge facing many American families. The U.S. needs to build 4.3 million more apartments by 2035 to meet the demand for rental housing. This includes 600,000 units (total apartments) to fill the shortage from underbuilding after the 2008 financial crisis. Underproduction of housing has translated to higher housing costs – resulting in a decline of 4.7 million affordable apartments (monthly rents less than $1,000) from 2015-2020.
Affordability challenges are not unique to households receiving federal subsidies. In fact, solidly middle-income households are facing constraints. The median asking rent for an apartment completed in the fourth quarter of 2024 was $1,899, a 10.7 percent increase from the same period in 2019, according to data from Census. For a renter to afford one of those units at the 30 percent of income standard, they would need to earn at least $75,960 annually.
Furthermore, Harvard University’s Joint Center for Housing for Housing Studies reported in June 2025 that “burdens have risen most dramatically for renters toward the middle of the income scale as housing costs have grown faster than income. In 2023, fully 70 percent of renters earning $30,000 to $44,999 were burdened, an increase of 3.5 percentage points since 2019 and 15.0 percentage points since 2001. Additionally, cost burdens have doubled to 45 percent since 2001 for households earning $45,000 to $74,999.” Accordingly, this is an issue impacting those workers who comprise the very fabric of strong communities nationwide, including teachers, firefighters, nurses and police officers.
The Workforce Housing Tax Credit would help build housing that is affordable to a wide range of income levels at a time such housing is increasingly difficult to afford.
The median asking rent for an apartment completed in the fourth quarter of 2024 was $1,899, and a renter would need to earn at least $75,960 to afford such a unit. The WFHTC would make housing more affordable and available to middle-income Americans.
