What Is the Low-Income Housing Tax Credit and How Does It Help Our Community?
Before we can discuss tax credits, it is important to restate what the area median income in Sandy Springs is, since these tax credits are designed to make housing more affordable for many of our residents.
In Sandy Springs, the area median income for an individual is $89,610; for a family, it is $99,785.
When people hear “tax credit,” they often think about tax forms and accounting terms.
Georgia lawmakers are considering changes to the State Low Income Housing Tax Credit (LIHTC) as part of a broader tax package. As of publication, both SB 476 and the Senate substitute tied to HB 134 include language that would reduce the state LIHTC match for certain future projects. The proposed change would reduce the state match from 100% to 50% for projects with initial applications filed on or after January 1, 2027.
This policy can sound technical. The impact is local and practical. When affordable housing projects lose financing support, fewer projects move forward and fewer homes get built or preserved. This issue affects something much more immediate in Sandy Springs: whether working families, seniors, veterans and people with disabilities can find stable housing they can afford.
What is the Low Income Housing Tax Credit (LIHTC)?
The LIHTC is one of the main tools used to finance affordable rental housing.
It is a tax incentive intended to increase the availability of low-income housing. The program provides an income tax credit to owners of newly constructed or substantially rehabilitated low-income rental housing projects. The affordable units are typically focused on 60% of AMI and below ($59,800 for a family or $53,700 for an individual).
Two levels of LIHTC are offered. The 9% credit is limited to a set amount of credits, nationally, and allocated by population among the 50 states. It is then competitively awarded by the state housing finance agency — in Georgia, that is the Department of Community Affairs — to projects that apply for the designation. Atlanta receives a preference for a portion of these funds each year. The 4% credit is offered on an application basis and is not limited in terms of the number of transactions that can qualify. Because of the deeper subsidy, the 9% credit is the LIHTC option preferred by many affordable housing developers.
Here is the plain-language version:
It helps cover the cost of building or preserving housing
In return, projects must keep homes affordable for income-qualified residents
It supports long-term affordability and a stable housing supply
Georgia's state LIHTC has historically worked alongside the federal LIHTC. That pairing matters because affordable housing projects usually need multiple funding sources to become financially viable.
LIHTC loans are term-limited, usually 25–30 years, and come with a requirement that a certain percentage of units be affordable to families earning 80% of AMI.
Many of the apartments in Sandy Springs, built in the 1980s and 90s, were built using LIHTC financing. This kept rents reasonable. Once the term limits expired — for most, in the 2010s — a lot of apartments were sold, upgraded and rents increased significantly. We have talked to many people who had to move when their apartments were sold, and their low-rent requirement expired. This began the shift from affordable housing for our families to market-rate housing that our families could no longer afford.
Why this matters in Georgia
According to materials shared by HouseATL, Georgia’s Department of Community Affairs has identified a major housing shortage, including the need for more than 113,000 new rental homes and another 100,000 homeownership units.
Those shortages hit low-income Georgians, seniors, people with disabilities and other vulnerable residents hardest.
HouseATL also describes the state LIHTC as Georgia’s primary state-level tool for creating and preserving affordable housing for low and moderate-income residents. That makes a reduction in the match a major policy change.
What do people in favor of reducing the state’s match say?
This is a very misunderstood program. Proponents of reducing the match feel that developers “get rich” on this because it lowers their taxes. While it is true that developers' taxes are lowered, that is the point of the incentives – to make it profitable for developers to build more affordable housing. Without this program, developers would not be able to build lower-income multi-family homes; the cost of construction and land in the metro area makes it financially unfeasible to build housing that our teachers, first responders and essential workers can afford.
How Does it Work?
Developers apply to the state for the LIHTC incentives. These tax credits come in two sizes; a 9% tax is highly competitive, and not all builders who apply are granted this tax rate. The 4% tax is less competitive and more common, but, again, it is not a given that builders will be granted this rate. It all comes down to how many credits and if the developer is in “good standing”.
What does this mean for Sandy Springs?
Sandy Springs feels the consequences of rising housing costs every day.
We see it when workers commute long distances. We see it when families struggle to stay near jobs, schools and support networks. We see it when seniors want to stay in the communities they helped build and cannot find the right options.
When the state weakens one of the tools that helps finance affordable housing, local communities lose options.
For Sandy Springs, that can mean:
fewer homes that working families can afford
fewer options for seniors who want to age in place
more pressure on workers and employers
more instability for renters
fewer tools for local leaders and housing partners trying to respond to rising costs
Why the state match matters
Affordable housing deals depend on layered financing.
The state match strengthens the financial stack and helps projects close funding gaps. Costs have climbed across the board. Interest rates, construction costs and insurance costs all put more pressure on project budgets.
A weaker state match can lead to:
fewer projects moving forward
more financing gaps
fewer deeply affordable units
more difficulty preserving existing affordable housing
Why this program gets attention from housing advocates
HouseATL’s materials point to several reasons advocates are pushing back on this proposed cut:
Georgia used the state LIHTC to create or preserve 34,731 affordable units from 2021 to 2025
A University of Georgia study reported 1,024 LIHTC-financed developments representing 95,809 units in Georgia from 2001 to 2021
More than 60% of those developments were outside metro Atlanta and about one-third were in non-metro areas.
These numbers show the scale of the program across the state. They also show how much Georgia relies on this tool.
What SST believes residents should watch
SST encourages residents to watch three things as this moves forward:
The final bill language
The details matter, and the language can change as legislation moves.How the change affects future projects
The proposal targets projects with future application timing, which also affects current project plans.What this means for local affordability
State policy choices affect the tools communities can use to respond to housing needs.
What you can do
Contact your state legislator to see where they stand on removing the state match for LIHTC. Share your thoughts with them.