Developers can apply for federal Low-Income Housing Tax Credits to help them build affordable housing projects. The amount of credit depends largely on project costs.
Project costs we looked at varied widely (shown below), and federal oversight of costs is limited. Federal and state agencies could use data on variables that affect cost—such as square footage and building type—to better monitor the tax credit. State agencies that administer the credit aren't required to report the kind of detailed cost data that could reduce fraud risks.
We recommended ways to make better data available to the government and improve oversight of the credit.
Development Costs (per unit) for New Rental Housing Built with Funding That Included Tax Credits, Selected States and Cities, 2011–2015
Figure showing maximum, minimum & median project costs for selected states and cities, with TX and GA lowest and CA highest.
